France’s belated budget and USAID’s global influence
Feb 7, 2025
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Simon Bouvier, Monocle’s Paris bureau chief, provides a deep dive into the French parliament’s newly adopted 2025 budget and the intricate political maneuvers behind it. He discusses how recent political stability might impact the economy. Meanwhile, Andrew Natsios, former head of USAID, sheds light on the ramifications of USAID’s dismantlement, especially its effects on global food security and humanitarian aid. The conversation touches on U.S.-EU trade tensions and their potential repercussions for Europe.
France's 2025 budget passage highlights Prime Minister Bayrou's political maneuvering to balance varied interests amid governmental challenges.
The proposed cuts to USAID raise alarms about potential negative impacts on global health initiatives and humanitarian assistance.
Deep dives
French Political Landscape Shifts
The French government, led by Prime Minister François Bayrou, has managed to secure a vote of confidence and pass the 2025 budget despite previous turmoil. Bayrou has successfully repositioned the political dynamic by sidelining the far-right Rassemblement National and leaning on the moderate left for support. Key concessions included preserving teaching jobs and increasing healthcare funding, which were pivotal in gaining socialist approval. However, the path ahead remains complex, as Bayrou's government must navigate a divided parliament and balance the interests of various political factions.
Impending US-EU Trade Tensions
Recent comments from U.S. President Donald Trump have raised concerns about a potential trade war with the European Union, driven by inaccuracies regarding the trade deficit figures. While the Trump administration may pursue tariffs, the exact targets remain uncertain, with possible focus areas including the automotive sector and digital technologies. Economists suggest that a trade deficit, such as the one with the EU, could indicate a healthy economy, challenging Trump's narrative. The EU is likely to respond strategically, possibly adopting similar tactics used in the past, including targeted tariffs and increasing purchases of U.S. goods.
Future of USAID Under Scrutiny
The U.S. foreign aid agency USAID is facing significant downsizing, with many staff members placed on administrative leave as it may be absorbed into the State Department. Critics highlight the chaotic process of these cuts, with no clear plan for continued humanitarian efforts in regions affected by civil strife and famine. The agency's historical role in global health initiatives and disaster response is emphasized as crucial for national security and preventive measures against pandemics. The shutdown of USAID's operations threatens the infrastructure developed over decades, raising concerns about the repercussions for global health and humanitarian assistance.
French parliament finally adopts the state’s 2025 budget – but has the government done enough to get the nation’s finances under control? Then: what do Trump’s tariffs mean for Europe and what are the ramifications of USAID’s dismantlement? Plus: we head to Switzerland where the Monocle team is researching a new book.