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France Has a New Government, Again. Politics and Crushing Debt Complicate Next Steps

France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)
France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)
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France Has a New Government, Again. Politics and Crushing Debt Complicate Next Steps

France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)
France's Prime Minister Francois Bayrou makes an address after observing a minute of silence as part of an official day of mourning for the victims of Cyclone Chido which hit the archipelago on the French Indian Ocean territory of Mayotte a week ago, at The Hotel Matignon in Paris on December 23, 2024. (AFP)

France’s president and prime minister managed to form a new government just in time for the holidays. Now comes the hard part.

Crushing debt, intensifying pressure from the nationalist far right, wars in Europe and the Middle East: Challenges abound for President Emmanuel Macron and Prime Minister Francois Bayrou after an already tumultuous 2024.

What's wrong with French finances? The most urgent order of business is passing a 2025 budget. Financial markets, ratings agencies and the European Commission are pushing France to bring down its deficit, to comply with EU rules limiting debt and keep France’s borrowing costs from spiraling. That would threaten the stability and prosperity of all countries that share the euro currency.

France’s debt is currently estimated at a staggering 112% of gross domestic product. It grew further after the government gave aid payments to businesses and workers during COVID-19 lockdowns even as the pandemic depressed growth, and capped household energy prices after Russia invaded Ukraine. The bill is now coming due.

But France’s previous government collapsed this month because Marine Le Pen’s far-right party and left-wing lawmakers opposed 60 billion euros in spending cuts and tax hikes in the original 2025 budget plan. Bayrou and new Finance Minister Eric Lombard are expected to scale back some of those promises, but the calculations are tough.

“The political situation is difficult. The international situation is dangerous, and the economic context is fragile,” Lombard, a low-profile banker who advised a Socialist government in the 1990s, said upon taking office.

“The environmental emergency, the social emergency, developing our businesses — these innumerable challenges require us to treat our endemic illness: the deficit,” he said. “The more we are indebted, the more the debt costs, and the more it suffocates the country.”

How long will this government last? This is France’s fourth government in the past year. No party has a parliamentary majority and the new Cabinet can only survive with the support of lawmakers on the center-right and center-left.

Le Pen — Macron’s fiercest rival — was instrumental in ousting the previous government by joining left-wing forces in a no-confidence vote. Bayrou consulted her when forming the new government and Le Pen remains a powerful force.

That angers left-wing groups, who had expected more influence in the new Cabinet, and who say promised spending cuts will hurt working-class families and small businesses hardest. Left-wing voters, meanwhile, feel betrayed ever since a coalition from the left won the most seats in the summer's snap legislative elections but failed to secure a government.

The possibility of a new no-confidence vote looms, though it's not clear how many parties would support it.

What about Macron? Macron has repeatedly said he will remain president until his term expires in 2027.

But France's constitution and current structure, dating from 1958 and called the Fifth Republic, were designed to ensure stability after a period of turmoil. If this new government collapses within months and the country remains in political paralysis, pressure will mount for Macron to step down and call early elections.

Le Pen's ascendant National Rally is intent on bringing Macron down. But Le Pen faces her own headaches: A March court ruling over alleged illegal party financing could see her barred from running for office.

What else is on the agenda? The National Rally and hard-right Interior Minister Bruno Retailleau want tougher immigration rules. But Bayrou wants to focus on making existing rules work. “There are plenty of (immigration) laws that exist. None is being applied,” he said Monday on broadcaster BFM-TV, to criticism from conservatives.

Military spending is a key issue amid fears about European security and pressure from US President-elect Donald Trump for Europe to spend more on its own defense. French Defense Minister Sebastien Lecornu, who champions military aid for Ukraine and ramping up weapons production, kept his job and stressed in a statement Tuesday the need to face down “accumulating threats” against France.

More immediately, Macron wants an emergency law in early January to allow sped-up reconstruction of the cyclone-ravaged French territory of Mayotte in the Indian Ocean off Africa. Thousands of people are in emergency shelters and authorities are still counting the dead more than a week after the devastation.

Meanwhile the government in the restive French South Pacific territory of New Caledonia collapsed Tuesday in a wave of resignations by pro-independence figures — another challenge for the new overseas affairs minister, Manuel Valls, and the incoming Cabinet.

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US Homelessness Up 18% as Affordable Housing Remains out of Reach for Many People

The number of homeless people reflects the huge problem faced by the world's largest economy (AFP).
The number of homeless people reflects the huge problem faced by the world's largest economy (AFP).
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US Homelessness Up 18% as Affordable Housing Remains out of Reach for Many People

The number of homeless people reflects the huge problem faced by the world's largest economy (AFP).
The number of homeless people reflects the huge problem faced by the world's largest economy (AFP).

The United States saw an 18.1% increase in homelessness this year, a dramatic rise driven mostly by a lack of affordable housing as well as devastating natural disasters and a surge of migrants in several parts of the country, federal officials said Friday.
The US Department of Housing and Urban Development said federally required tallies taken across the country in January found that more than 770,000 people were counted as homeless — a number that misses some people and does not include those staying with friends or family because they do not have a place of their own.
That increase comes on top of a 12% increase in 2023, which HUD blamed on soaring rents and the end of pandemic assistance. The 2023 increase also was driven by people experiencing homelessness for the first time. The numbers overall represent 23 of every 10,000 people in the US, with Black people being overrepresented among the homeless population.
“No American should face homelessness, and the Biden-Harris Administration is committed to ensuring every family has access to the affordable, safe, and quality housing they deserve,” HUD Agency Head Adrianne Todman said in a statement, adding that the focus should remain on “evidence-based efforts to prevent and end homelessness.”
Among the most concerning trends was a nearly 40% rise in family homelessness — one of the areas that was most affected by the arrival of migrants in big cities. Family homelessness more than doubled in 13 communities impacted by migrants including Denver, Chicago and New York City, according to HUD, while it rose less than 8% in the remaining 373 communities. Nearly 150,000 children experienced homelessness on a single night in 2024, reflecting a 33% jump from last year.
Disasters also played a part in the rise in the count, especially last year's catastrophic Maui wildfire, the deadliest US wildfire in more than a century. More than 5,200 people were staying in emergency shelters in Hawaii on the night of the count.
“Increased homelessness is the tragic, yet predictable, consequence of underinvesting in the resources and protections that help people find and maintain safe, affordable housing,” Renee Willis, incoming interim CEO of the National Low Income Housing Coalition, in a statement. “As advocates, researchers, and people with lived experience have warned, the number of people experiencing homelessness continues to increase as more people struggle to afford sky-high housing costs.”
Robert Marbut Jr., the former executive director of the US Interagency Council on Homelessness from 2019 to 2021, called the nearly 33% increase in homelessness over the past four years “disgraceful” and said the federal government needs to abandon efforts to prioritize permanent housing.
“We need to focus on treatment of substance use and mental illness, and bring back program requirements, like job training,” Marbut said in an email.
The numbers also come as increasing numbers of communities are taking a hard line against homelessness.
Communities — especially in Western states — have been enforcing bans on camping as public pressure grows to address what some residents say are dangerous and unsanitary living conditions. That follows a 6-3 ruling earlier this year by the Supreme Court that found that outdoor sleeping bans don’t violate the Eighth Amendment. Homeless advocates argued that punishing people who need a place to sleep would criminalize homelessness.
There was some positive news in the count, as homelessness among veterans continued to trend downwards. Homelessness among veterans dropped 8% to 32,882 in 2024. It was an even larger decrease for unsheltered veterans, declining 11% to 13,851 in 2024.
“The reduction in veteran homelessness offers us a clear roadmap for addressing homelessness on a larger scale,” Ann Oliva, CEO of the National Alliance to End Homelessness, said in a statement. “With bipartisan support, adequate funding, and smart policy solutions, we can replicate this success and reduce homelessness nationwide. Federal investments are critical in tackling the country’s housing affordability crisis and ensuring that every American has access to safe, stable housing.”
Several large cities had success bringing down their homeless numbers. Dallas, which worked to overhaul its homeless system, saw a 16% drop in its numbers between 2022 to 2024. Los Angeles, which increased housing for the homeless, saw a drop of 5% in unsheltered homelessness since 2023. California, the most populous state in the US, continued to have the nation's largest homeless population, followed by New York, Washington, Florida and Massachusetts.
The sharp increase in the homeless population over the past two years contrasts with success the US had been having for more than a decade.
Going back to the first 2007 survey, the US made steady progress for about a decade in reducing the homeless population as the government focused particularly on increasing investments to get veterans into housing. The number of homeless people dropped from about 637,000 in 2010 to about 554,000 in 2017.
The numbers ticked up to about 580,000 in the 2020 count and held relatively steady over the next two years as Congress responded to the COVID-19 pandemic with emergency rental assistance, stimulus payments, aid to states and local governments and a temporary eviction moratorium.