France's new government plans to gain around €50 billion in savings from the 2025 budget, finance minister Eric Lombard announced, setting a lower savings target than his predecessor.

Lombard emphasised the need for a more gradual approach to budget cuts to safeguard economic growth, with the draft budget aiming for a deficit between 5.0% and 5.5% of GDP. 

The previous administration had aimed to reduce the deficit to 5% from 6.1% in 2024 but collapsed last month after opposition rejected parts of the 2025 budget.

“We have to support the economy. I'm thinking about companies that are lacking confidence, we can't hold growth back,” Lombard commented on France Inter radio.

The finance minister is holding talks with opposition parties to gain support for the new 2025 budget in a bid to avoid a no-confidence vote like the one that led to the fall of the previous government, Reuters reports.

France's inability to pass a 2025 budget has unsettled investors and ratings agencies.

The previous administration, under Michel Barnier, had aimed for savings of €60 billion, but the deeply divided parliament found it challenging to agree on such significant cuts.

To pass the new budget, the government will likely need support from the Socialists, who advocate for higher taxes on the wealthy and large corporations.

Lombard stated that the revised bill would not introduce new taxes but would restructure a proposed tax on the largest companies to generate around €8 billion.  Additionally, there would be a tax hike targeting the wealthiest individuals.

The finance minister added he’s open to adjusting the 30% flat tax on capital gains and income, introduced by President Macron in 2018, to make France more appealing to global investors. 

However, this tax has faced criticism, with some labelling Macron as a president who caters to the wealthy.