Bayrou secures time - France's reforms in focus

The French Prime Minister Francois Bayrou has gained valuable time with his offer to renegotiate the controversial pensions law of 2023. His strategic move secures him the support of a sufficient number of deputies needed to pass a much-needed budget. Bayrou announced that unions and business representatives will be tasked with negotiating changes that could halt the raising of the minimum retirement age from 62 to 64 years. However, these negotiations must not jeopardize the financial stability of the public system. If no agreement is reached within three months, the current plan will remain in effect. By approaching the Socialists, who are open to negotiations with the unions, Bayrou gains time to push through the budget. The Prime Minister also made it clear that discussions about new reforms should be conducted without set taboos. A lack of support for a vote of no confidence from right-wing deputies indicates that Bayrou's efforts may bear fruit. Nonetheless, it remains uncertain whether Socialist support will continue if the promised changes do not materialize. Bayrou also plans to address the economic challenges with a less ambitious budget plan that aims to reduce the deficit without significantly increasing corporate taxes. He promises a noticeable increase in healthcare spending and a strengthened fight against tax optimizations by wealthy individuals. The forecast for economic growth was lowered to 0.9%. The European community will closely monitor Bayrou's budget plans and their compliance with the new fiscal rules. The political course will also affect investors' confidence in French assets, particularly as many have withdrawn in recent months. Bayrou's attempt to ease the tense situation with the Socialists could be crucial for stabilizing the French political and economic landscape.