By Dominique Vidalon and Geert De Clercq
PARIS (Reuters) -French Finance Minister Eric Lombard said on Friday that talks on getting the 2025 budget passed through parliament were “on the right track”, although some compromises may still be needed.
Lombard also told TF1 television that the government was sticking to its goal of bringing the public sector deficit to 5.4% of gross domestic product this year and was still vulnerable to a possible no confidence motion.
Lombard was speaking as a panel of French lawmakers wwas meeting for a second day on Friday to thrash out the final text of a much delayed 2025 budget bill that is key to restoring investor confidence over the country’s finances and the government’s survival.
The seven senators and seven members of the lower house were holding the closed-door negotiation to find a compromise before the bill heads to the lower house floor next week, when it could trigger a possible motion of no-confidence in the government
“What I am hearing is that the talks are taking place in a constructive spirit and progressing at a good pace … I trust lawmakers. They understand the seriousness of the situation. I think we are on the right path,” Lombard said.
In the 2025 budget bill under discussion, Prime Minister Francois Bayrou wants to bring the public sector deficit down to 5.4% of GDP this year after it was forecast to hit close to 6% last year due to a shortfall in tax income and higher than expected spending.
Lombard said the 5.4% target was “a commitment” made to the French people and the European Union that would not change.
France’s failure to agree the 2025 budget has rattled investors while sapping business and household confidence. The government has had to make billions of euros in concessions to forge a bill with a chance of getting passed.
Even if a deal is struck by the panel, Bayrou will not be out of danger as the bill heads to the lower house next week.
He is expected to use constitutional powers to ram the budget compromise through without a regular vote, triggering a no-confidence motion.
The role of the Socialists will be key next week. Should they decide to back the motion that will be put forward by the hard-left to topple Bayrou, he would find himself dependent on the grace of the far-right Marine Le Pen’s RN party again.
If Le Pen decides to join the Socialists in backing the no-confidence motion, Bayrou’s government could fall, just weeks after his predecessor Michel Barnier.
Lombard said that this scenario remained “totally possible”.
RN lawmaker Jean-Philippe Tanguy, a member of lawmakers’ panel, said on RTL radio the draft budget should drop provisions to force state-owned utility EDF to keep selling power to competitors at reduced prices.
“It would be like Saudi Arabia giving up control over its oil; it is unacceptable,” he said.
“This budget is a wet blanket. Bayrou has smoothed all the rough edges so that it scares nobody, it is a phantom budget with hardly any spending cuts – for one euro of spending cuts, there are nine euros of taxes,” he said.
He declined to say whether his party would back a no-confidence motion, but acknowledged the urgent need for France to finalise a budget.
“We are nearly in February and the country has no budget. France needs to have a budget, for its companies, and for financial markets. The cost of our state debt has already risen by 8 billion euros and it could get worse,” he said.
(Reporting by Dominique Vidalon, Sudip Kar-Gupta and Geert De Clercq; Editing by Toby Chopra and Philippa Fletcher)
