Pushing Military Spending and Neoliberal Austerity, French PM Emulates Trump

On July 4, U.S. President Donald Trump signed the “One Big Beautiful Bill“ Act into law, implementing his reactionary policy agenda. This megabill is the most sweeping legislation in modern U.S. history and elevates neoliberalism to a new stage with huge tax cuts for the rich and equally huge cuts to the social safety net, including food programs and Medicaid coverage. Indeed, those who somehow interpreted Trump’s policies as representing an end to the neoliberal order in the U.S. could hardly have been more wrong.

Now, it is the turn of the French government to show the world that neoliberalism remains the dominant organizing principle for advanced capitalist societies. Confronted with a faltering economy, big budget deficits, and record-high debt levels, the government of Prime Minister François Bayrou has unveiled a budget plan that shares some uncanny similarities with Trump’s megabill, although it is surely not as brutal as the “Big Ugly Bill” will be for most U.S. citizens.

The French budget plan for 2026 seeks to restore public finances with proposals that include slashing thousands of civil service jobs, shutting down so-called “unproductive” national agencies, cutting prescription drug subsidies, reducing health care expenditure by €5 billion, and freezing pensions and virtually all other benefits paid out by the government to 2025 levels. The controversial budget plan proposed by the French prime minister also includes abolishing two statutory holidays from the country’s annual calendar — Easter Monday and May 8. The latter, known as Victory Day, is a pivotal holiday that commemorates the victory of the Allies over Nazi Germany. The government claims that abolishing those two public holidays would generate several billion euros in additional state revenues through increased economic activity. The French prime minister has also left open the possibility of additional statutory holidays receiving the axe.

All in all, the proposed budget plan aims at €43.8 billion ($50.88 billion) in deficit reduction for 2026 in order to return the public deficit to 4.6 percent of France’s gross domestic product (GDP), from its current 5.8 percent, and to 2.9 percent of GDP by 2029.

“It’s the last stop before the cliff, before we are crushed by the debt,” Bayrou said in a speech to members of parliament, cabinet members, and journalists, invoking Greece’s debt crisis of more than a decade ago as a warning of what could be in store for France. Currently, France’s public debt is at 114 percent of the country’s GDP and is the third-largest in Europe, behind Greece and Italy.

Across Europe, neoliberals are still using the Greek debt crisis to create fear in public consciousness about government spending so they can enforce draconian austerity measures without opposition or public outcry. Incidentally, the Greek debt crisis erupted in late 2009, when the nation’s public debt-to-GDP ratio had climbed to 118 percent and interest rates began to rise substantially, with the 10-year government bond yield surging over 11 percent in late 2010 as the country’s debt-to-GDP ratio trended around 128 percent and was deemed unsustainable.

More than 15 years later, Greece’s economy is still stuck in the same outmoded growth model of the early 2000s, and the government debt-to-GDP ratio stands today at 146 percent but is now assumed by markets and the euro masters to be sustainable. Three massive bailouts from the European Union and the International Monetary Fund worth a staggering total of nearly €310 billion ($360 billion), accompanied by the most sadistic fiscal policies in the postwar era, devastated economic activity and resulted in constantly growing unemployment, which in 2014 rose as high as 28 percent, alongside an alarming rise in suicide rates.

That’s the logic of neoliberal financial capitalism for you, a system that is structured to be brutally exploitative with a powerful stranglehold over the real economy, serving only a privileged few and inherently prone to crises but always counting on rescues from Big Government through massive bailouts.

But there is more obscenity included in the French government budget plan than already mentioned. Just like Trump’s megabill, Bayrou’s budget plan slashes the social safety net but expands the defense budget. Indeed, the proposed cuts in the social safety net and even the assault on French labor through the abolition of a historically significant holiday like Victory Day are made precisely in order to make room for increases in military spending. President Emmanuel Macron announced on July 13 that France will boost military spending significantly due to growing regional uncertainties, with Russia allegedly representing the biggest threat to European security. In fact, Macron went so far as to make the outrageous statement that the steep increases in military spending are needed because Europe is under a greater threat than at any other point since the end of World War II. Subsequently, Bayrou’s budget plan will add €3.5 billion to the 2026 defense budget and €3 billion to the 2027 budget. Bayrou himself declared the defense budget to be “sacrosanct” and exempt from budget cuts.

Neoliberal economics is of course tightly linked to militarism and warmongering. Most NATO countries are boosting their military spending to 5 percent of GDP, largely because the alliance remains subservient to the United States and European leaders want to appease Donald Trump, who has threatened to disengage from NATO over the U.S. paying an “unfair share” as member. But in so doing, the European governments become full and willing partners in the militaristic adventures of the United States, which now views China, not Russia, as the biggest threat to its supremacy. In any case, the idea that Russia somehow has strategic aims to militarily attack Europe is as ludicrous as it is nonsensical. To what end? A question never asked by European leaders and therefore never answered.

Nonetheless, thanks to its multi-party system, the political environment in France is radically different from the one that exists in the United States, and the odds that the budget measures proposed by Bayrou’s government will pass are probably small. First, Bayrou leads a minority government and his budget plan faces opposition from both the left and the far right. In fact, Jean-Luc Mélenchon, leader of the left-wing party La France Insoumise, has already called for Bayrou’s resignation, while Marine Le Pen, leader of the far right National Rally, has threatened to topple the government if it doesn’t roll back the spending plan. Interestingly enough, both the left and the far right in France see the government budget plan as something of a class war budget. As hard as it may be to imagine a far right leader adopting a working-class perspective, Le Pen took to X to declare that “this government prefers to attack the French people, workers and pensioners, rather than hunt waste.” Indeed, the French government also risks backlash over its austerity-driven budget plan from some of the country’s major trade unions, and it is highly unlikely that the majority of French citizens will swallow cuts in the social safety net while military spending receives a major boost.

Lest we forget, the previous French prime minister, Michel Barnier, was forced to resign in December 2024, just three months into his term. Left-wing lawmakers and unions had consistently opposed the plans of the Barnier government to slash the state budget by many billions of euros in order to shrink the deficit. Eventually, the French government collapsed after Barnier tried to pass a social security bill (a key component of the government’s budget proposal) without parliamentary approval. In a rare display of cooperation, left and far right lawmakers joined forces to pass a vote of no confidence against Prime Minister Barnier.

Given the state of French politics and society, it is quite likely that the current government of François Bayrou will meet the same fate as that of Michel Barnier’s government. If that were to happen, it would certainly be yet another victory in the ongoing struggle of the ever-rebellious French people against the cruelty of neoliberalism.