France finally approved the 2026 budget this Monday, when two votes of no confidence were rejected, allowing the legislation to pass and signaling 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 2024 snap election resulted in a Parliament without a majority, precisely when a huge hole in public finances made the need to tighten the belts more urgent.
The budget negotiations cost two prime ministers their jobs, destabilized debt markets, and alarmed France’s European partners.
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However, Lecornu — whose chaotic two-step appointment in October was mocked around the world — managed to secure the backing of Socialist lawmakers through costly, but targeted, concessions, increasing his leverage 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 raise taxes on families and businesses,” Lecornu said in a post on X after the no-confidence votes, adding that he was submitting the budget to the Constitutional Court to ensure that it complies with the Constitution.
Despite the budget deficit still high at 5% of GDP, as observed by Lecornu, investors were buoyed by the new stability. The French government debt risk premium relative to the German benchmark returned to the levels last seen in June 2024, before Macron’s snap election announcement.
Two no-confidence votes presented by the far-left and the far-right did not secure a majority after the Socialists announced they would not back them, meaning that the 2026 budget — already more than a month late — was approved.
The Socialist’s main achievement was the suspension of an unpopular pension reform, delaying the planned increase in the retirement age to 64 until after next year’s presidential election.
