France faces growing risks of another political crisis over pension reform disputes

As reported by Bloomberg, French authorities' negotiations over the pension reform, aimed at raising the retirement age from 62 to 64 and introduced in 2023 by Emmanuel Macron, have stalled.

According to the agency, the country's government is also facing problems regarding budget. By mid-July, it should present another plan to cut spending and raise taxes. The parliament opposes these actions. However, as Bloomberg emphasizes, such measures are necessary in the current situation of rapidly growing national debt.

After last year's political turbulence in France, the last few months have been relatively calm following the successful adoption of the budget by the government of François Bayrou in February. However, the controversy surrounding the pension reform is still able to plunge the country back into a period of uncertainty.

Earlier, the instability of the French government, coincided with a sharp deterioration in the budget deficit, undermined investor confidence in French assets and led to an increase in borrowing costs, hitting the country's economy. If pension reform talks fail, France's economic health could face yet another blow, Bloomberg concludes.