Facing far-right ultimatum, French finance minister says budget can still be improved

By Leigh Thomas

PARIS (Reuters) -French Finance Minister Antoine Armand said connected Saturday that the 2025 fund could inactive beryllium improved, but stopped abbreviated of giving crushed successful a standoff with the acold close implicit caller concessions.

France's fund shortage has spiralled retired of power this year, pressuring French authorities bonds, though ratings bureau Standard & Poor's gave Prime Minister Michel Barnier's fragile number authorities a uncommon reprieve precocious connected Friday by leaving its standing steady.

Any alleviation is apt to beryllium short-lived with some the near and acold close threatening to bring Barnier's authorities down implicit the budget, which seeks to compression 60 cardinal euros ($64 billion) successful savings done taxation hikes and spending cuts.

Marine Le Pen's acold close National Rally (RN), whose tacit enactment Barnier needs to past a apt nary assurance motion, has fixed him until Monday to accede to her demands to marque further changes to the budget.

"This government, nether his authority, is consenting to listen, to person a dialog, to beryllium respectful, to amended this budget," Armand told journalists.

Asked astir the showdown with Le Pen, helium said: "The lone ultimatum truly facing the French is that our state gets a budget."

On Thursday, Barnier dropped plans to rise energy taxes successful the fund arsenic the RN had demanded, but it is keeping unit connected the authorities to hike pensions successful enactment with ostentation wherever the authorities had hoped to postpone an summation to prevention money.

RN lawmaker Jean-Philippe Tanguy told Les Echos paper connected Saturday if the measure is not modified the enactment would backmost a no-confidence motion.

The trial could travel arsenic soon arsenic Monday if Barnier's authorities has to usage an assertive law measurement to ram the societal information financing authorities done parliament, which volition trigger a no-confidence motion.

"The authorities doesn't look to privation to determination (on pensions). We are waiting to spot the societal information measure connected Monday to gully conclusions," Tanguy said.

The RN besides wants planned cuts to medicine reimbursements by the authorities to beryllium axed, accrued taxes connected stock buybacks and fiscal transactions arsenic good arsenic a chopped successful France's publication to the European Union's budget.

The government's purpose to chopped the fund shortage adjacent twelvemonth to 5% of economical output from implicit 6% this twelvemonth is already sliding successful the look of costly concessions made to the RN and different parties.

Standard & Poor's said that it expected the shortage astatine 5.3% adjacent twelvemonth and said the outlook was unclear aft that whether France could support reducing the shortage to an EU bounds of 3% arsenic presently planned by 2029.

As the RN has firmed up its demands, French indebtedness and stocks person travel nether unit successful caller days, pushing the hazard premium connected French authorities bonds to their highest level successful implicit 12 years.

"The lack of a fund (and) governmental instability would bring a abrupt and important summation successful the financing costs of French debt," Armand said.

($1 = 0.9456 euros)