France finally approved the 2026 budget this Monday, when two votes of no confidence were rejected, allowing the legislation to pass and heralding a period of relative stability for the fragile minority government of Prime Minister Sébastien Lecornu.
Budget negotiations consumed the French political class for almost two years, after President Emmanuel Macron’s early 2024 election resulted in a Parliament without a majority, just as a huge hole in public finances made the need to tighten belts more urgent.
Budget negotiations cost two prime ministers their jobs, unsettled debt markets and alarmed France’s European partners.
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However, Lecornu — whose chaotic two-stage appointment in October was met with worldwide derision — managed to secure the support of socialist parliamentarians through expensive but targeted concessions, increasing his importance in the process.
“France finally has a budget. A budget that embraces clear choices and essential priorities. A budget that controls public spending, that does not increase taxes on families and businesses,” Lecornu said in a post on X following the votes of no confidence, adding that he was submitting the budget to the Constitutional Court to ensure it complied with the Constitution.
Despite the still high budget deficit of 5% of GDP observed by Lecornu, investors were encouraged by the new stability. The French government debt risk premium relative to the German benchmark has returned to levels last seen in June 2024, before Macron’s anticipated election was announced.
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Two votes of no confidence presented by the far left and the far right failed to obtain a majority after the socialists announced that they would not support them, meaning that the 2026 budget — already more than a month late — was approved.
The Socialists’ main achievement was the suspension of an unpopular pension reform, postponing a planned increase in the retirement age to 64 until after next year’s presidential election.
