France's new Prime Minister Sebastien Lecornu held out an olive branch to the left on Saturday, ruling out his predecessor's plan to cut two public holidays to help slash the deficit.
His gesture came a day after the Fitch ratings agency downgraded France's credit rating — measuring its ability to pay back debts — from "AA-" to "A+".
The US agency, one of the top global institutions gauging the financial solidity of sovereign borrowers, also warned that France's debt mountain would keep rising until 2027 unless urgent action was taken.
Political leaders on the far right and hard left laid the blame at the feet of President Emmanuel Macron, calling for a break from his politics.
Lecornu, less than a week in the job, announced in an interview with the regional press that he was dropping one of the most controversial policies of his predecessor Francois Bayrou.
"I have decided to withdraw the suppression of the two public holidays," said Lecornu, calling for renewed dialogue with social partners to find other ways of financing the 2026 budget.
Asked if he would consider implementing the so-called Zucman tax on the ultra-rich — a proposal rejected by the previous administration — he said only that he was willing to work on "issue of tax justice".
France's employers federation MEDEF fired a warning shot Saturday, insisted they would mobilise against any tax increases on businesses in the new budget.
'Paying the price'
The ratings downgrade comes after Bayrou resigned as prime minister Tuesday, having lost a parliamentary confidence vote the day before over an attempt to get an austerity budget adopted.
Reacting to the ratings announcement, Bayrou lamented that France was "a country whose 'elites' lead it to reject the truth (and) is condemned to pay the price".
Pushing for major cuts to reduce the French deficit and debt, he had calculated that cutting two public holidays would have brought in 4.2 billion euros ($4.9 billion) to the 2026 budget.
Far-right figurehead Marine Le Pen on Saturday called for a "break with Macronism", denouncing the president's policies as "toxic incompetence".
Hard-left leader Jean-Luc Melenchon, who has demanded Macron's impeachment, also called for "an end to Macronism and its policies harmful to France and its people".
Members of the outgoing government also voiced concern. Interior Minister Bruno Retailleau said the downgrade was a punishment "for decades of fiscal mismanagement" and "chronic instability".
The downgrade will further complicate Lecornu's task of drawing up a budget for next year at the head of what will probably be a minority government.
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