By Patrick Decloitre, RNZ Pacific correspondent French Pacific desk

French Minister for Overseas Naïma Moutchou’s first visit to New Caledonia is marked by marathon political talks and growing concerns about the French Pacific territory’s deteriorating economic situation.

Moutchou arrived on Monday on a visit scheduled to last until tomorrow.

With a backdrop of political uncertainty and the economic consequences of the May 2024 riots, she has been meeting with a large panel of political and economic stakeholders over concerns about New Caledonia’s future.

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On Monday, she met a group of about 40 political, business and economic leaders.

All of them voiced their concerns about New Caledonia’s short-term future and what they term as a “lack of visibility” and fear about what 2026 could hold.

Some of these fears are related to a lack of financial support necessary for a proper recovery of the local economy, which was devastated by the 2024 riots and caused damages of over 2 billion euros (NZ$4 million) with an estimated drop of the local GDP by 13.5 percent, the destruction of hundreds of businesses and the subsequent loss of tens of thousands of jobs.

The French government last year unlocked a special loan of 1 billion euros, but it will now have to be reimbursed and has created a huge debt for the French Pacific archipelago.

Huge loan issue
A vast majority of economic and political leaders now seem to agree that the huge loan granted in 2024 should be converted into a non-refundable grant.

New Caledonia’s indebtedness rate, as a result, soared to 360 percent for debts that will have to be refunded as early as 2026, at a high interest rate of 4.54 percent.

“The urgency is about finding jobs for those 12,000 people who have lost their jobs”, employers’ association MEDEF-NC vice president Bertrand Courte told reporters after the meeting.

“We need to kick-start the economy with large-scale works and only the French State can do it”, he said, echoing a feeling of disappointment.

The fears are further compounded by looming deadlines such as the local retirement scheme, which is threatening to collapse.

A special scheme to assist the unemployed, which was extended from 2024, is also to come to an end in December 2025. There are pleas to extend it once again at least until June 2026.

“We do understand that now, from France’s point of view, it’s a give and take situation”, said Medium and Small Businesses president Christophe Dantieux.

Public spending cuts
“[France] will only give if we make more efforts in terms of reforms. But there have already been quite a few efforts made in 2025, especially 15 percent cuts on public spending, but it looks like it’s not enough.”

One of the scheduled large-scale projects was the construction of a new prison, which was announced in 2023 but has not started.

On the macro-economic scale, New Caledonia is also facing several crucial challenges.

Huge losses in terms of tax collection have been estimated to a staggering US$600 million, as well as a deficit of some US$500 million in public accounts.

Another obstacle to boosting investments or re-investments, since the 2024 riots, was that most insurance companies are continuing to exclude a “riots risk” clause in their new policies.

On the French national level, the much-disputed 2026 Budget for Overseas is scheduled to take place starting November 18 and this also includes threats such as the intention to scrap tax exemption benefits for French companies intending to invest in France’s overseas territories, including New Caledonia.

“There is an economic, financial and budget urgency”, New Caledonia government President Alcide Ponga said following the minister’s meeting with the whole Cabinet.

“The minister is well aware that our budget situation is catastrophic and she intends to help us”, Congress (Parliament) President Veylma Falaeo said after her meeting with Moutchou.

Yohann Lecourieux, mayor of the city of Dumbéa (near the capital Nouméa), also provided a telling example of the current hardships faced by the population: “Eight hundred of our students no longer eat in our schools’ canteens simply because the families can no longer afford to pay.”

Political talks: no immediate outcome
On Tuesday, Moutchou focused on political talks with all parties on the local chessboard, one after the other.

The major challenge was to resume political discussions after one of the major components of the pro-independence movement, the FLNKS (Kanak and Socialist National Liberation Front), mainly dominated by historic Union Calédonienne, decided to withdraw from a proposed consensual project signed in July 2025 in Bougival (in the outskirts of Paris) after a week-long session of intense talks fostered by Moutchou predecessor, Manuel Valls.

The Bougival text was proposing to create a “State of New Caledonia”, as well as a New Caledonian nationality and transfer of key powers (such as foreign affairs) from France.

Since FLNKS denounced its negotiators’ signatures, all of New Caledonia’s other parties have committed to defend the Bougival text, while at the same time urging FLNKS to come back to the table and possibly submit their desired modifications.

Since she was appointed to the sensitive portfolio last month, Moutchou, in Paris repeated that she did not intend to “do without” FLNKS, as long as FLNKS did not intend to “do without the other (parties)”.

Moutchou also said her approach was “listen first and then reply”.

Following a two-hour meeting on Tuesday between Moutchou and the FLNKS delegation, it maintained its stance and commitment to “sincere dialogue” based on a “clear discussion and negotiation method”.

‘We will not change course’ – FLNKS
“We will not change course. This is a first contact to remind of the defiance and loss of trust from FLNKS with the [French] State since December 2021,” FLNKS spokesperson Dominique Fochi said.

He said the FLNKS still “wishes out of the French Republic’s fold in order to create solid ties with countries of the region or even with France”.

Saying the Bougival text was a “lure of independence”, FLNKS had previously also posed a pre-requirement that future negotiations should be held in New Caledonia and placed under the auspices of the United Nations, in a spirit of decolonisation.

Late October 2025, both Houses of the French Parliament endorsed, for the third time, that New Caledonia’s crucial provincial local elections (scheduled to be held before December 2025) should now take place no later than June 2026.

The postponement was validated by France’s Constitutional Council on November 6.

This was specifically designed to allow more time for political talks to produce a consensual agreement on New Caledonia’s political future, possibly a continuation or refining (by way of amendments) of the Bougival text.

Pro-France parties
On the side of parties who want New Caledonia to remain part of France (and are opposed to independence), Les Loyalistes leader and Southern Province President Sonia Backès, said she and other pro-France parties also remained open to further discussions.

“But we’ve already made a lot of concessions in the Bougival agreement”, she said.

“[Moutchou] now has understood that New Caledonia is out of breath and that we now have to move forward, especially politically”, Rassemblement-LR leader Virginie Ruffenach said after talks with the French minister.

“We can no longer procrastinate, or else New Caledonia will not recover if we don’t have an agreement that carries prospects for all of our territory’s population,” Ruffenach said.

“We are still hopeful that, by the end of this week, we can move forward and find a way… But this cannot be the theory of chaos that’s being imposed on us.”

The ‘moderate’ pro-independence parties
Two former pillars of FLNKS, now described as “moderates” within the pro-independence movement, the PALIKA (Kanak Liberation Party) and UPM (Progressist Union in Melanesia), who have distanced themselves from FLNKS since August 2024, after the riots, are now staunch supporters of the Bougival project.

“We are committed to (the Bougival) accord… Our militants said some improvements could be made. That’s what we told the minister and she said yes”, UNI Congress caucus president Jean-Pierre Djaïwé told local media after discussions with Moutchou.

He said those possible amendments could touch on the short-term handing over of a number of powers by France, but that this should not affect the Bougival project’s fragile “general balance”.

They say the text, although not perfect because it is a compromise, still makes full sovereignty achievable.

PALIKA held its important annual congress over the weekend and says it will announce its main outcomes later this week.

A strong faction within PALIKA is currently pushing for the “moderate” line (as opposed to the hard-line FLNKS) to be pursued and therefore a formal divorce with FLNKS should be made official.

On the “pro-Bougival” side, currently re-grouping all pro-France parties and the pro-independence moderates PALIKA and UPM, grouped into a “UNI” (Union Nationale pour l’Indépendance) caucus at the local Congress, some of the mooted possible future options could be to place all bets on the local referendum to be held early 2026 and its possible outcome pronouncing a vast majority for the July 2025 text.

They believe, based on the current party representation at the Congress, that this Bougival text could gather between 60 and 80 percent of local support.

Another party, Wallisian-based Eveil Océanien and its vice-president Milakulo Tukumuli told public broadcaster NC la 1ère on Sunday another option could be to just “agree to disagree” and base the rest of future developments on the outcomes of New Caledonia’s provincial elections.

This article is republished under a community partnership agreement with RNZ.

This post was originally published on Asia Pacific Report.