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France enters 2025 amidst ongoing political and economic uncertainty, with a divided government struggling to address the country’s high budget deficit and debt levels. President Macron’s centrist government fell after failing to pass the 2025 budget, leading to a new minority government facing challenges in gaining approval from political rivals and financial markets. Moody’s recent credit rating downgrade highlights concerns about France’s public finances and the impact of political fragmentation on fiscal consolidation efforts, with the CAC 40 index experiencing a 2.2% decline in 2024 due to the ongoing turmoil.
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