[Decoding France] - 2025: Hope Beneath the Political Gridlock?

In politics, some contrasts are more striking-and revealing-than others. The hyperactivity of the freshly reelected forty-seventh president of the United States, making bold announcements and signing a staggering number of executive orders to reverse most of his predecessor’s flagship policies, offers a sharp contrast to the inertia of a France bogged down in a political quagmire. For this third installment of Decoding France, we delve into the state of French politics at the dawn of a new year-a year that begins without a budget but with the same persistent irritants.

All of this is impeding France-and Europe-from mounting a coordinated strategic response to a United States that has already entered a new era. Against the backdrop of the new Bayrou-led government, pensions, plunging birth rates, and reactions to Trump’s return, here’s what you need to know.

2025 Begins Without a Budget-But With a Hint of Stability?

The year 2024 ended in France with the fall of Michel Barnier’s government, which was ousted by a broad coalition of opposition parties. Now, 2025 is beginning with a new cabinet under Prime Minister François Bayrou, who appears determined to outlast his predecessor. On January 15, during his general policy address to the National Assembly, Bayrou succeeded where Barnier had failed by securing the confidence of Socialist MPs, who abstained from backing the motion of no confidence tabled by La France Insoumise.

This marks a significant political shift on the left. The unified front (NFP) that emerged for last year’s snap parliamentary elections has fractured, splitting into two opposing camps. On one side, Jean-Luc Mélenchon’s faction continues to pursue its strategy of chaos, which is aimed squarely at forcing the president to resign. On the other side, the Socialists, led by Olivier Faure (with former President François Hollande quietly reemerging as a key influencer), have embraced dialogue.

Could this be the first sign of France adopting a culture of compromise-a practice often unfairly conflated with surrender? Not quite, although there is a perceptible shift. However, this newfound willingness to engage will soon face a major test: the upcoming budget vote in early February. For the moment, no consensus has been reached.

The 2025 budget framework sets ambitious targets: a deficit reduction to 5.4 percent of GDP, growth projected at just 0.9 percent, and inflation lowered to 1.4 percent (from 1.8 percent in the previous budget). Senators have identified billions in spending cuts, but demands from the Socialists persist, including higher taxes on financial transactions, a levy on stock buybacks, continued windfall taxes on large corporations, and a halt to plans to eliminate four thousand teaching positions in public education.

Pensions and Birth Rates: Bayrou’s Impossible Equation?

Beyond the budget, pensions remain a hot-button issue. Bayrou has opted to revisit the controversial 2023 reform, which raised the retirement age to sixty-four. He has entrusted social partners-unions and organizations of employers-with drafting a new framework. The process will begin with an expedited audit by the Court of Accounts to set the financial parameters.

This marks a clear departure from the top-down governance style that characterized Emmanuel Macron’s presidency. Macron, who sidelined intermediary bodies since his first term in 2017, viewed unions as outdated "caste-like" institutions. Bayrou, in contrast, met with trade unions as well as business and other organizations on January 17 to launch negotiations-a symbolic but meaningful shift in method.

This trend raises existential questions about the viability of France’s social model, which is built on intergenerational solidarity. With eighteen million retirees and a stagnating workforce, it has become increasingly urgent to find solutions. For all that Macron’s 2024 call for a "demographic rearmament" sparked controversy, its results remain elusive. To reverse this decline, urgent action is needed to address childcare access, housing costs, and other economic barriers to parenthood. Add to this the urgency of rebuilding Mayotte after Hurricane Chido, where the humanitarian situation on the island brings back the migratory and institutional challenges in the public debate.

France and Europe Face Trump’s Return: A Challenge-and an Opportunity?

France’s internal challenges are compounded by external pressures, but the return of Donald Trump to the White House-even as it reignites anxieties across Europe-should not just be regarded as a threat; it also invites reflection on potential opportunities.

So far, President Macron has taken a cautious approach. He embraced transatlantic coordination very early on and in the absence of a clear understanding of Trump’s Europe policy by inviting him to Paris. In his address to French ambassadors in January, he recalled that France had managed to work with Trump during his first term, even navigating disagreements on climate and the international world order. Macron also pointed to Trump’s 2024 visit to Notre-Dame as an example of Franco-American strategic dialogue, particularly on Ukraine. "If we choose weakness and defeatism, we will not be respected," he warned.

Later, in his address to the military, Macron adopted a firmer tone, decrying the "erosion of international norms" and "growing acceptance of violent rhetoric" as increasingly serious threats-a veiled critique of Trump’s foreign policy. At the anniversary of the Élysée Treaty between France and Germany on January 22, Macron called for a stronger, more sovereign Europe capable of responding to such challenges. However, his lofty rhetoric on defense and economic resilience was not accompanied by any concrete European initiatives other than those he had already outlined in his two major speeches at the Sorbonne in 2017 and 2024, respectively.

Trade tensions add another layer of urgency. While Trump has yet to set a timeline for imposing tariffs on European exports, it seems inevitable that they will be implemented, which will call for a unified European response. At Davos, Ursula von der Leyen emphasized the need for engagement while cautioning against a "race to the bottom" fueled by protectionist measures. However, von der Leyen faces an internal challenge: there is strong disagreement on European governments on how to respond to US tariffs.

Back in France, concerns are also mounting over the unregulated use of social media, electoral interference, and maintaining support for Ukraine-all issues that call for a strong united European response. Each of these challenges underscores the growing disconnect between France’s internal gridlock and the external pressures reshaping the global landscape.

A clear indicator of this optimism is that since January 1, 2025, the major European stock indices have risen by approximately 7 percent-including the CAC40, which has returned to its pre-dissolution level-almost twice the performance of American indices. While we must remain clear-eyed about our weaknesses, we should also have the courage to acknowledge our strengths.

Furthermore, France must look beyond domestic debates over issues such as pensions and, together with the EU, take on forward-looking challenges that will truly define the future. The major summit on artificial intelligence that France will host from February 10 represents an opportunity for France, alongside its key European partners, to showcase its ambition and commitment in this critical domain.

Copyroight image: Thibault Camus / POOL / AFP
Emmanuel Macron and Donald Trump during the re-opening ceremony of the landmark Notre-Dame Cathedral in Paris, December 7, 2024.