[Decoding France] - Bayrou on the Edge, 2027 in the Air

The failure to materialize of the long-anticipated "white smoke" at François Bayrou’s pension reform conclave represents a serious blow to the prime minister, whose position now appears more fragile than ever. This is, perhaps, an opportune moment to reflect on all the efforts that have been made regarding pension reform since 2017-and to ask whether they have all amounted to nothing.

Bayrou is unlikely to face an immediate vote of no confidence-if there is to be one, it will probably be in autumn during the critical 2026 budget debate. By then, the far-right National Rally (RN) may well hold the balance of power again. As Bayrou quietly prepares for his possible exit, other political figures are already starting to look toward the 2027 presidential race, which is increasingly shaping the political climate.

Pensions: An Unfinished Conclave and a Persistent Burden

After four months of negotiations between unions and employer organizations, the pension reform conclave officially collapsed on Monday, June 23. Despite progress on key topics such as arduous work conditions, women’s careers, and system financing, no agreement was reached. France’s Pensions Advisory Council still predicts a deficit of €6.6 billion by 2030.

François Bayrou, however, has refused to characterize the process as a failure. At a press conference on Thursday, June 26, he insisted that even without a formal agreement, the discussions had yielded "progress" and that "advances" had been made. "This work, contrary to what has been widely said and written, has been remarkably useful," he commented-a statement clearly aimed at defending both the process and his own role in it.

Where did the progress come from? On two major points-retirement age and the role of capitalization-the CFDT, France’s largest union, evolved significantly. While there was meaningful movement on issues such as senior employment and gender fairness, these gains can be credited more broadly to all sides at the table. The real breakthrough lies in how the CFDT and other actors began to dismantle the old taboos around how pensions are funded and when people should retire.

It would be a mistake to hold François Bayrou solely responsible for the conclave’s failure. He at least attempted to reestablish a social dialogue that had been seriously eroded under Macron’s presidency. In truth, the inability to reach a deal is more a reflection of the weakened state of the social partners themselves. France’s labor unions and employer organizations are shadows of their former selves: Union membership has stagnated at around 10 percent for years (and at barely 5 percent among the under-30s), and union presence in the workplace is steadily declining. Even the CFDT and MEDEF, still leaders in their respective camps, are losing relative influence, and both are facing more radical lines, both internally and externally. This deadlock is, therefore, a collective failure-while Bayrou is to blame to some extent, it is also the case that the unions and employers’ associations failed to seize a historic opportunity to prove they could shoulder responsibility at the national level.

Despite ambitious promises of fairness and simplicity, that effort was suspended before it could be implemented. The second attempt, passed in 2023 under Elisabeth Borne’s government, pushed the legal retirement age from sixty-two to sixty-four. It survived intense street protests and a narrow legal path-but left deep scars in public opinion.

The cumulative result has been nearly eight years of political energy spent on reforms that remain unpopular, incomplete, and socially divisive.

France seems locked in a pension gridlock loop. For Bayrou, the recent breakdown revives a bitter truth: French democracy is still struggling to resolve its most enduring structural challenges.

There is another reason this matters. François Hollande’s decision not to seek re-election in 2017 was largely due to his failure to "invert the unemployment curve." It was only after 2017-under Macron-that unemployment began to decline in a sustained manner. Could pensions become the new litmus test for presidential viability in 2027? One of the biggest political hurdles for any future leader will be to finally take pensions off the political agenda-just as unemployment was gradually sidelined in the late 2010s.

Bayrou Wobbles but Doesn’t Fall-Yet

This latest failure has cast an even darker shadow over Bayrou’s government. However, paradoxically, his survival may be more likely in the short term. The Socialist Party has tabled a motion of no confidence, a move welcomed by La France Insoumise (LFI), Jean-Luc Mélenchon’s party. However, without support from the National Rally, which has declined to back the motion, it is unlikely to pass.

Still, the risk hasn’t gone away-it has merely been postponed. All eyes are now on the autumn budget debate, which promises to be the real battleground. France must find nearly €40 billion in savings, but no credible, detailed plan for how to achieve this has emerged so far. One of the only concrete ideas circulating is the concept of a "white year"-a one-off spending freeze across public accounts. This has been floated alongside other hot-button proposals like a social VAT or targeted tax hikes. Against this backdrop, a recent INSEE report highlighted the urgency: France’s public debt now stands at 114 percent of GDP-the third highest in Europe, behind only Greece and Italy. Those countries are, however, steadily reducing their debt burdens, even as France’s debt burden continues to rise and won’t start to level off until 2027.

For now, Bayrou remains in place-not because he is strong, but because no one else wants the job. Taking charge of this government would mean owning a highly unpopular austerity drive just two years ahead of the presidential election. It is no wonder that even Macron’s loyalists are staying put.

The paralysis is visible even within Macron’s camp. Gabriel Attal, now at the helm of Macron’s Renaissance party, has effectively drawn a line under the fragile center-right coalition, rejecting any renewed alliance with Les Républicains. "I don’t see any shared societal project," he said in Le Monde, calling instead for investments in artificial intelligence, ecological transition, and equal opportunity-hardly a conservative turn.

The picture on the left is no clearer. The Socialist Party’s recent reactivation of institutional levers, like its motion of no confidence, was welcomed by LFI-but tensions remain. Meanwhile, Raphaël Glucksmann is trying to build an alternative progressive bloc, urging a bottom-up movement based on policy substance, not ideological rigidity.

For now, Bayrou stays. But the forces aligning against him are gathering-and the countdown to the autumn budget has already begun.

Macron Abroad: A Voice for Nuance, or a cry in the wilderness?

While his domestic agenda stalls, Emmanuel Macron continues to push his diplomatic vision in a world increasingly defined by hard-power confrontation.

Macron’s foreign minister, Jean-Noël Barrot, raised eyebrows by criticizing recent US strikes in the region, warning that they risk destabilizing already fragile alliances. At the same time, France has maintained dialogue with regional actors including Egypt, Jordan, and Lebanon in an effort to avoid wider escalation.

Perhaps most symbolically, Macron has revived France’s commitment to recognizing a Palestinian state-though this remains, for the moment, a "matter of timing." Recognition is seen in Paris as a lever, not a declaration-one that could help rebuild Europe’s credibility as a peacemaker. Sticking to this line, the French government has not taken a formal position vis-à-vis the ongoing EU-level discussion regarding sanctions on Israel, nor has it openly criticized the Israeli strikes on Iran. Germany, by contrast, has taken a more security-first approach, with Defense Minister Pistorius explicitly backing Israel’s containment of Iran.

On Ukraine, Macron continues to champion a firmer European defense posture. At the summit at The Hague, Paris affirmed its pledge to raise defense spending to 5 percent of GDP, in line with all the other NATO allies. But with soaring debt and spending cuts on the horizon, how credible is that promise?

France’s diplomatic voice, advocating nuance and persuasion, risks being further drowned out in a world more driven by power than by cooperation-oriented consultations.

The 2027 Presidential Race: a Quiet Start but a Crowded Field

As Macron struggles to make himself heard on the global stage and Bayrou clings to power at home, another scene is quietly taking shape: the 2027 presidential race.

The field is already crowded. Dominique de Villepin, former foreign minister under Jacques Chirac and best known for his powerful 2003 speech at the UN opposing the Iraq War, has launched a new political party, La France humaniste. In the current geopolitical context, that legacy may play in his favor with French voters. Strikingly, this former right-wing statesman is now gaining traction among left-leaning audiences-an unexpected reversal of political identity. MEP Raphaël Glucksmann on his side is touring France with a series of town halls and policy proposals after formally issuing the first bases of a presidential program. Gérald Darmanin is preparing a summer policy offensive, while Edouard Philippe, the frontrunner in the race to succeed Emmanuel Macron, sharpens his message in private meetings.

Some candidates are all but official-Jean-Luc Mélenchon, Marine Le Pen (or perhaps Jordan Bardella? This was the subject of Decoding France #7). Others, such as Olivier Faure and Gabriel Attal, are still testing the waters. For all of them, the horizon has changed. With Macron constitutionally barred from running, the field is wide open-and the uncertainty immense.