France PM Barnier tells parliament ‘colossal’ debt is ‘sword of Damocles’

New French PM promises ‘targeted tax hikes’ and spending cuts in order to cut budget deficit, national debt.

France’s new Prime Minister Michel Barnier has outlined the policy programme of his new government, seeking to shore up its fragile position just three weeks after taking office.

In his first policy speech on Tuesday, Barnier said that France must slash its budget deficit and trim its tottering debt pile. He also vowed a combination of higher taxes and spending cuts.

Barnier, appointed last month, faces the challenging task of plugging a huge hole in public finances at a time when the fragmentation of parliament and infighting in his minority government will make it hard to push through reforms.

“The sword of Damocles hanging over us is our colossal financial debt,” Barnier told French lawmakers on Tuesday.

France’s deficit was making it weaker in Europe, he added.

“Our aim is to reduce the deficit to five percent [of GDP] in 2025 … on the right path to reach the three-percent ceiling in 2029,” two years later than previously planned, Barnier said, adding that two-thirds of the cuts would come from “reducing spending” but that the government would “ask big companies making large profits to contribute to the recovery”.

Besides addressing the economy, Barnier also told parliament that he was delaying local elections in the overseas territory of New Caledonia until the end of 2025.

The semi-autonomous French Pacific territory witnessed violent unrest between Indigenous Kanak people and French loyalists earlier this year. The violence erupted in May after France voted to approve reforms to allow thousands more French residents who have lived in the territory for 10 years to vote.

Barnier, a right-wing former European Union Brexit negotiator, was appointed by centrist President Emmanuel Macron to bring some stability after the political chaos created by a hung parliament that resulted from snap elections earlier this year.

But France’s Unbowed lawmakers, who say that the vote was “stolen” and that there should be a left-wing prime minister, brandished their voter cards as Barnier started speaking and frequently shouted him down during his speech.

“The French did not vote for you,” some yelled.