France's Prime Minister, Michel Barnier, has expressed concern over the country's budgetary situation amid ongoing difficulties in forming a government. In a statement on Wednesday, Barnier described the budgetary situation as "very serious" and emphasised the need for a comprehensive assessment. Nearly two weeks into his tenure, Barnier has struggled to assemble a government that reflects the diverse priorities of France's fragmented parliament and addresses the growing budget deficit. His proposals for managing debt and increasing tax fairness have met resistance from lawmakers in President Emmanuel Macron's bloc, who oppose any tax hikes. Outgoing Interior Minister Gérald Darmanin has made it clear that Macron's centrist group will not support a government that raises taxes. Barnier's conservative Republicans hold a minority in a parliament dominated by three major blocs: the leftist New Popular Front, Macron's centrists, and Marine Le Pen's National Rally. Barnier has postponed a scheduled meeting with Macron's representatives, highlighting the complexities of the coalition negotiations. He aims to form a balanced government to address the challenges facing France, including the highest tax burden in Europe. Pressure mounts as Barnier faces deadlines for presenting the 2025 budget. The Bank of France has suggested that current plans to reduce the deficit by 2027 are unrealistic and may require a revised timeline with a focus on spending cuts and selective tax increases. Attribution: Bloomberg Subediting: M. S. Salama
