France, once considered a pillar of stability within the European Union, now finds itself at a crossroads as political turmoil and economic uncertainty ripple through the nation. Recent weeks have seen a cascade of setbacks—from a downgraded credit outlook to stalled renewable energy projects—leaving businesses, lawmakers, and ordinary citizens wondering what lies ahead for the country’s future.
On Friday, October 17, 2025, new data signaled a faster-than-expected decline in French business activity for October, sending tremors through an already jittery economy. According to a Reuters report cited by Invezz, the country’s offshore wind sector, a cornerstone of President Emmanuel Macron’s green energy ambitions, has been particularly hard hit. Developers and equipment suppliers now anticipate a pronounced slowdown, as a fractured legislature struggles to pass critical energy framework changes and government tenders remain in limbo.
This malaise is not confined to the energy sector. On October 24, international credit rating agency Moody’s downgraded France’s future credit outlook from “stable” to “negative,” while maintaining its Aa3 rating. As reported by Bloomberg News, Moody’s warned, “This political instability risks undermining the government’s ability to address major policy challenges such as high fiscal deficits, increasing debt burdens, and rising continuous borrowing costs.” The agency’s concerns were echoed by Fitch and Standard & Poor’s, both of which lowered France’s credit rating by one notch to “A+” from “AA-” in September and October respectively, citing the same political instability.
At the heart of France’s troubles is a political system in disarray. The country has cycled through six prime ministers in just two years, with Sebastien Lecornu now at the helm as the third prime minister in a little over a year. Lecornu’s tenure has been anything but smooth. Earlier this month, he narrowly survived a parliamentary confidence vote—his second in as many months—by agreeing to suspend a deeply unpopular pension reform plan, a key component of Macron’s strategy to shore up public finances. The left-wing Socialist party, a crucial swing group in the National Assembly, had threatened to topple his government if the reform was not put on ice.
The Socialists’ influence doesn’t end there. With France under pressure to pass a spending bill by the end of 2025 to rein in its ballooning deficit and debt, they have demanded the inclusion of a tax on the ultra-wealthy as the price for their support. The original proposal, crafted by French economist Gabriel Zucman, would impose a minimum two-percent tax on assets above 100 million euros, targeting just 1,800 of the country’s wealthiest households and aiming to raise around 20 billion euros annually. However, Lecornu’s government, backed by the far right, has balked at taxing professional assets and instead proposed a narrower levy on wealth management holdings with at least five million euros.
In a bid to break the impasse, the Socialists have floated a compromise: a minimum three-percent tax on assets above 10 million euros, excluding family and “innovative” businesses. Yet Zucman himself has cautioned against watering down the measure, warning on France Inter radio, “Creating a tax riddled with loopholes, offering opportunities for evasion... is condemning oneself to failure.” The proposal was set to be debated in parliament on Saturday, October 25, but the outcome remains uncertain.
The deadlock is a direct result of last year’s snap parliamentary elections, called by President Macron in a bid to consolidate his power. Instead, the move backfired: his centrist bloc lost its majority, the far right gained ground, and parliament became hopelessly divided. The resulting gridlock has made it nearly impossible to pass major reforms, from pension overhauls to energy policy—a fact not lost on international investors or credit agencies.
Nowhere is the impact of this paralysis more evident than in France’s offshore wind sector. Despite being Europe’s second-largest economy, France lags far behind its neighbors in renewable energy. It currently has just 3 gigawatts (GW) of offshore wind power installed or in development, dwarfed by Britain’s 16 GW already in operation. The French government has set an ambitious goal to quadruple this capacity, but progress has stalled. New tenders for offshore wind projects are now a year behind schedule, with two additional tenders totaling 12 GW—promised for bidding by the end of 2024 and awarding in autumn 2026—still not launched.
Last month, a tender for a 1 GW wind farm off France’s west coast failed to attract a single bid. Christoph Zipf, a spokesperson for the industry group WindEurope, attributed the lack of interest to “the intricate nature of the project site and a lack of clarity regarding government support,” as reported by Reuters. Previously, government tenders included state support for bidders, but that is no longer a given. The uncertainty has forced several renewable energy companies to freeze hiring and reduce headcount, with some even initiating layoffs. Jules Nyssen, president of France’s Renewable Energy Syndicate, confirmed that companies “are currently freezing salaries and hiring.”
Even when projects do move forward, they face new hurdles. Last month, RWE, a German utility giant, won a tender as part of a consortium with TotalEnergies for a 1.5 GW offshore wind farm. Yet, RWE soon announced its intention to withdraw, citing that “several factors have diminished its value in comparison to other international ventures,” according to a company spokesperson. The broader industry malaise has been compounded by the global context, with the U.S. market also slowing after President Donald Trump revoked offshore wind projects and halted new developments.
Meanwhile, France’s financial woes show no signs of abating. Moody’s warned that suspending pension reform would only exacerbate the country’s fiscal challenges and harm its long-term growth prospects if the pause persists. “If there is no budget plan to preemptively curb spending or increase tax revenues, France’s fiscal deficit will remain longer and larger than we currently expect,” the agency predicted. The French House of Representatives has begun discussions on the budget, but with political divisions deepening, reaching a consensus appears increasingly elusive.
Citizens, too, are feeling the strain. Protests have erupted in cities like Lille, as frustration mounts over stalled reforms and economic stagnation. The mood across France is one of uncertainty, with the public and private sectors alike holding their breath for signs of stability.
As the year draws to a close, France stands at a pivotal moment. The decisions made—or not made—in the coming weeks will shape not only the country’s economic trajectory but also its role as a leader in Europe’s green transition. For now, the nation is caught in a delicate balancing act, struggling to reconcile political realities with the urgent need for reform.
