France’s 2026 budget hits setback as National Assembly blocks income provisions

ISTANBUL

The French National Assembly has overwhelmingly rejected the income provisions of the government’s 2026 budget, delivering a major setback to the government’s efforts to reach a deficit-cutting deal amid an already deeply divided political climate, public broadcaster France 24 reported.

Lawmakers voted down the revenue section on Saturday, which outlines taxation measures, after more than 120 hours of debate in the lower house, with 404 votes against and just one vote in favor.

The move throws the budget process into deeper uncertainty and shifts the focus to the Senate, which is expected to remove many of the amendments adopted by deputies.

Finance Minister Roland Lescure sought to reassure markets and lawmakers, saying after the vote that “we are only halfway through the parliamentary process” and voicing confidence that a cross-party compromise remains possible.

“I remain convinced that the majority of parliamentary groups will be able to find the necessary common ground to enable our country to have a budget,” he said.

France is under mounting pressure from investors to rein in its widening deficit. But passing the budget has become increasingly difficult since President Emmanuel Macron lost his absolute majority in last year’s snap elections.

A confrontation over the previous year’s budget eventually toppled former Prime Minister Michel Barnier’s government.

Earlier, Prime Minister Sebastien Lecornu pledged not to use special constitutional powers, notably Article 49.3, to force the budget through, granting lawmakers unusual freedom to reshape the bill but also raising the risk of legislative deadlock.

A decisive element in the coming days will be the position of the Socialist Party, which holds a key swing role. Their decision to reject or abstain on the budget texts is closely tied to the government’s offer to suspend a contentious pension reform in an attempt to court their support.

Once the Senate completes its review, a cross-party joint committee will attempt to negotiate a compromise text.

Under the Constitution, if parliament fails to adopt the budget by early December, the government retains the option of imposing it by decree.