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There are(RNRNGDPRNYour browser does not support the element. two ways to look at the new French government run by François Bayrou, the 73-year-old centrist prime minister who took office last month and laid out his plans to parliament on January 14th. One is that the minority government is constructively seeking compromise among the three rival blocs that make up the deadlocked National Assembly, with particular attention to the left. The other is that it is opening the way to unravelling President Emmanuel Macron’s economic policies, including his flagship second-term reform, an increase in the pension age.The centrepiece of Mr Bayrou’s speech was a decision to reopen talks “without taboo” on the pension reform. Forced through parliament without a direct vote in 2023 after it prompted weeks of crippling strikes and political opposition, this raised the legal minimum retirement age from 62 to 64. He has now handed discussion about adjusting the rules governing pensions, which consume nearly a quarter of all government spending, to representatives of employers’ federations and the unions. If within three months they cannot reach agreement at net zero cost, declared Mr Bayrou, he will keep the existing rules.With this offer, Mr Bayrou is hoping to secure at least the tacit support of the Socialist Party, and to peel its deputies away from the radical wing of parliament’s four-party left-wing alliance. The prime minister runs a minority government, composed of ministers ranging from ex-Socialists to conservatives, which is not based on any formal coalition pact. Faced with the same problem, his conservative predecessor, Michel Barnier, was toppled by a no-confidence vote in December after just three months in office. He was brought down by an unholy alliance of the left and Marine Le Pen’s hard-right National Rally ).This time, Mr Bayrou is hoping he can use pension talks to buy time and get a revamped 2025 budget drafted and through parliament, without courting the . In a nod to the left, his fiscal plans are already less ambitious than Mr Barnier’s, which were designed to curb the budget deficit from 6.1% of in 2024 to 5% this year. Despite devoting a big chunk of his speech to France’s dismal history of excessive public debt, Mr Bayrou promises a more modest deficit reduction in 2025 to 5.4%—far above the European Union’s 3% limit. This would mean some €50bn ($52bn) of budget savings and tax increases, probably on the rich and on big firms. Eric Lombard, the new technocratic finance minister, is to reveal details in the coming weeks. For now the government has rolled over the 2024 budget, without inflation adjustments.In the short run Mr Bayrou is expected to survive his first no-confidence motion, tabled by three of the left-wing alliance’s parties and scheduled for January 16th. The fourth, the Socialists, are divided; some think Mr Bayrou has not compromised enough. The may not want to bring down another government yet. But such caution may not apply to the budget.France remains under surveillance. On January 13th the spread of French ten-year sovereign bonds over Germany’s ten-year benchmark bond widened to 0.88 percentage points, the same level it reached last month amid worries over the previous budget. The new pension talks may fail. But there is a real risk that the price of passing a new budget could be the undermining of the business-friendly policies that have hitherto defined Mr Macron’s presidency. “People in government aren’t worried so much about his legacy,” says one centrist figure, “as about their own survival.”
