French PM Barnier Signals Tax Increase on the Wealthy, According to Reuters

By Mathieu Rosemain

PARIS – Prime Minister Michel Barnier indicated on Sunday that he is open to increasing taxes on France’s wealthiest individuals and certain large corporations to address significant public finance issues, while assuring that the lower and middle classes would be shielded from further tax burdens.

This announcement comes as President Emmanuel Macron’s office revealed a new right-leaning government aiming to resolve the political stalemate that emerged after the summer snap election. One of the government’s immediate and pressing challenges will be to construct a budget for 2025, as France grapples with a rapidly increasing budget deficit.

"I’m not going to impose additional tax burdens on all French citizens, especially not on the most modest, working individuals, or the middle class. However, I cannot exclude the wealthiest from the collective effort to rectify our financial situation," Barnier stated during an interview with France 2 television.

France’s total debt currently stands at 110% of GDP, equating to nearly 3.2 trillion euros. Lower-than-anticipated tax revenues combined with rising expenditures by local governments have pushed the public sector budget deficit toward an alarming 6.2% of economic output in the coming year, if left unaddressed.

This situation has placed France in violation of European Union deficit regulations, leading credit rating agencies to closely monitor the country’s financial strategies.

"A significant portion of our debt is held by international and foreign markets. We must uphold France’s credibility," Barnier emphasized.

As a former chief negotiator for the EU during the Brexit discussions, Barnier also expressed willingness to revisit Macron’s pension reforms, though he asserted that any modifications should not jeopardize the stability of the pension system’s finances. He highlighted the need to better account for the challenges faced by working mothers throughout their careers and expressed openness to feedback from both employers and labor unions.

Political opponents from the left and far-right have already threatened votes of no confidence against Barnier’s government, arguing that it doesn’t reflect the outcome of the July election.

"This is merely an extension of Macron’s policies. It’s a government without a future," claimed Jordan Bardella, chairman of Marine Le Pen’s National Rally party.

Barnier’s government currently lacks a parliamentary majority and will require support from far-right factions to remain in power. In light of this, he suggested a stronger stance on immigration.

"We need a European response and must also take decisive action at home," Barnier stated. "We have to address immigration issues with greater rigor."