URGENT UPDATE: New French Prime Minister Sebastien Lecornu has just announced he will not proceed with plans to cut two public holidays, a move originally proposed to help reduce the nation’s budget deficit. This decision comes right after credit rating agency Fitch Ratings downgraded France’s sovereign credit score to A+, marking the country’s lowest rating on record.
Lecornu, who took office on September 10, 2023, is under immense pressure to stabilize France’s economy just days into his administration. In interviews with local papers La Provence and Ouest France, he stated, “We are paying for the instability,” reflecting the urgency of the situation as he scrambles to form a cabinet and draft a 2026 budget that can garner support in a deeply divided parliament.
The downgrade from Fitch exacerbates an already challenging landscape for Lecornu, who has become President Emmanuel Macron’s fifth prime minister in less than two years. He faces a daunting task of passing a slimmed-down budget through parliament, a challenge that has previously led to the ouster of France’s last two prime ministers. The country’s debt has been under heightened scrutiny since a confidence vote ousted veteran centrist François Bayrou, who advocated for a 44 billion euro budget squeeze.
Lecornu has committed to exploring “creative ways” to collaborate with political rivals, including the Socialist Party, Ecologists, and Communist Party, as he aims to maintain financial stability. “My mindset is simple: I want neither instability nor stagnation,” he emphasized during his first interview since taking office. He acknowledged that the upcoming budget may not fully reflect his convictions and called for “modern, frank and high-level parliamentary discussions.”
As rising interest rates continue to impact state finances, Lecornu warned, “When interest rates rise, they have a direct impact on the state’s finances, but also directly on the lives of households and businesses.” The government must propose a sound financial trajectory for France, which is crucial for national sovereignty.
With the economy in a precarious state, Lecornu’s leadership will be pivotal in navigating the complexities of a divided parliament and the looming financial challenges ahead. As developments unfold, all eyes are on France to see how Lecornu will tackle these urgent issues and whether he can secure the necessary support for his budgetary plans.
