France's 2026 Budget Set for Final Approval After Political Showdown

PARIS — France's long-delayed 2026 budget is expected to cross the finish line on Monday, concluding months of tense negotiations and political brinkmanship. The final hurdle rests on Prime Minister Sebastien Lecornu surviving a fresh wave of no-confidence motions tabled by opposition parties.

The path to this point has been fraught. On Friday, Lecornu invoked a constitutional power to push the budget through the National Assembly without a direct vote for the third and final time—a move that immediately triggered the latest challenges from the hard-left France Unbowed (LFI) and the far-right National Rally (RN).

Political analysts expect the motions to be defeated in Monday evening's vote, allowing the budget to proceed to final enactment. This would provide a temporary respite for Lecornu's minority government, which has been navigating a hung parliament since President Emmanuel Macron lost his majority in the 2024 snap elections.

The budget saga represents a "partial failure," as Lecornu himself conceded last month, when he was forced to abandon a pledge not to use the controversial bypass procedure. The deadlock, lasting over four months, was only broken after the government made significant concessions to the Socialist Party, a key swing bloc.

Deficit Targets and Social Trade-Offs

At its core, the budget aims to rein in France's public deficit, targeting a reduction to 5% of GDP in 2026 from an estimated 5.4% in 2025. This marks a retreat from an earlier, more ambitious goal of 4.7%, reflecting the political constraints of a fragmented legislature.

To boost revenues, the plan introduces higher taxes on certain large corporations, projected to raise €7.3 billion. A proposed wealth tax on the ultra-rich, championed by the left, was ultimately scrapped. In exchange for their support, the Socialists secured several flagship social measures, including a one-euro daily meal for students and an increased top-up payment for low-income workers.

A significant €6.5 billion boost to military spending forms the "heart" of the budget, according to Lecornu, underscoring France's strategic priorities amid a volatile geopolitical landscape.

Broader Political and EU Context

The budget's journey highlights France's persistent political instability. The separate social security budget was narrowly adopted in December, delaying a contentious pensions reform until 2028. However, agreement on broader state spending proved elusive, caught between a right-leaning Senate demanding austerity and a lower house where left-wing factions pushed for higher tax revenues.

Brussels is watching closely. France's debt-to-GDP ratio, the EU's third-highest after Greece and Italy and nearly double the bloc's 60% limit, has drawn persistent scrutiny from European institutions. This budget is seen as a critical test of Paris's commitment to fiscal discipline.

Lecornu, 39, is the third prime minister to grapple with the budget since the 2024 elections, following the ousting of his two predecessors over cost-cutting plans. His government's survival remains precarious.

Voices from the Ground:

"This budget is a messy compromise, but it's the only way forward given the political arithmetic," says Claire Moreau, a political science professor at Sciences Po. "It provides minimal fiscal consolidation while throwing a lifeline to vulnerable groups. The real test will be implementation."

Antoine Dubois, a small business owner from Lyon, expresses cautious relief: "The uncertainty has been terrible for planning. I'm glad there's finally a resolution, even if the corporate tax changes will pinch. Stability is what the economy needs right now."

In sharp contrast, Élodie Renard, a union organizer with the CGT, is scathing: "This is a betrayal. They force it through without a proper vote, protect the super-rich from a wealth tax, and call it a victory? It's a budget for the wealthy, passed through an anti-democratic maneuver. Lecornu should be ashamed."

Thomas Klein, an economist at a leading bank, offers a market perspective: "Investors will welcome the reduced uncertainty and the commitment, however modest, to deficit reduction. It avoids a crisis but doesn't solve France's fundamental debt challenge. The EU will likely remain unimpressed."