Left and right prey on weak French government as it prepares 'austerity' budget

France's new and already beleaguered government is set to present its 2025 budget on Thursday amid an ongoing fiscal crisis — and a brewing political one — for the euro zone's second-largest economy.

The budget is being widely previewed as an "austerity" budget that will see the government of new Prime Minister Michel Barnier present tax-hiking and cost-cutting measures that could rile opposition parties on both the left and right, and even the centrists that put him in power.

In his inaugural speech to the National Assembly on Oct 1., Barnier gave a flavor of the measures that the conservative, centrist government is likely to propose including higher taxes on big business and steep spending cuts to central government in order to combat France's fiscal crisis.

Barnier then revealed that the government is planning to tighten fiscal policy by 60 billion euros ($65.9 billion) or 2% of GDP next year in a bid to reduce the country's deficit to around 5% of GDP in 2025, down from an expected 6.1% this year.

Of that 60 billion euros, around 40 billion euros is expected to include spending cuts from within central and local government, including a six-month delay to the indexation of pension payments, while the other 20 billion euros will come from higher taxes on "wealthy individuals" and "large companies."

The budget, set to be presented to parliament by new Finance Minister Antoine Armand, comes as France is already the subject of an excessive deficit procedure by the European Commission, given that its budget deficit far exceeds the 3% of GDP (gross domestic product) level to which EU member states are meant to adhere.

Having asked for more time to submit its longer-term budgetary plans to the Commission, as new EU fiscal rules