Olivier Blanchard told POLITICO that the country is “absolutely not doing what is needed” to get its finances in order.

The European Union has told France its plan for slower deficit reduction next year is still within the bloc’s rules, handing Francois Bayrou ’s government a reprieve in its battle to repair creaking public finances.

Current prime minister François Bayrou confirmed a tax on high-income earners would be included as part of his planned 2025 budget yesterday (January 17). Mr Bayrou originally said in his key policy address given earlier this week that such a tax would not be included in his budget, as it could not be applied ‘retroactively’.

The fledgling Paris government is “trying their best” to get a budget through parliament after a previous version sunk its predecessor.

President Emmanuel Macron picked François Bayrou as France’s new prime minister earlier this month, despite his lack of any parliamentary majority. Bayrou’s appointment on December 13 came just over a week after his predecessor Michel Barnier’s government was felled by a no-confidence vote proposed by the Left and joined by the far right,

France's new government set on Wednesday a lower target for spending cuts this year than its predecessor as it races to get a 2025 budget passed by the end of the month. The budget bill has been stuck in the Senate since lawmakers in the lower house ousted the previous government over parts of its belt-tightening push,

French Prime Minister Francois Bayrou on Tuesday warned parliament about his country's spiralling debt and said he was ready to reopen talks on pension reform, hoping to avoid defeat in any no-confidence vote that could prolong the country's rumbling political crisis.

France faces a deep political crisis, with Macron’s government faltering amid social unrest and the far-right's rise

The prospects of French Prime Minister Francois Bayrou's minority government surviving in the long term appeared slimmer after the Socialist Party raised the threat of backing a no-confidence vote on Thursday.

Shortly after the policy statement of France's new Prime Minister François Bayrou, a vote of no confidence was filed against his government on Tuesday evening. Members of the leftist party France Unbowed (LFI) justified the move with the composition of the centre-right Cabinet and Bayrou's budget policy.

French Prime Minister Francois Bayrou passed the first test of his new minority government on Thursday as he survived a vote of no-confidence called by the hard left after the centre-left Socialist Party did not back the motion. The far-right National Rally (RN) party of Marine Le Pen had already signalled it would not support the motion.

The new French government plans to limit temporary levies on companies to one year and will instead focus on taxing the rich as it seeks ways to narrow the deficit, according to Budget Minister Amelie de Montchalin.