France has successfully passed its budget for the year, following a complex political struggle that saw the minority government endure several no-confidence votes. The approval comes at a time of heightened scrutiny from both domestic and European stakeholders, as Prime Minister Sébastien Lecornu utilised constitutional provisions to sidestep a parliamentary vote, thereby ensuring the continuity of government operations.
A Hard-Won Agreement
In a significant parliamentary address, Prime Minister Lecornu highlighted the resilience of the French populace, asserting that “the French people refuse this disorder and want our institutions to function.” This sentiment reflects the broader desire for stability amidst a backdrop of political uncertainty that has rattled financial markets.
The budget’s passage was facilitated by the Socialist party’s decision to abstain from opposing the government, a move that came with concessions, including a halt to President Emmanuel Macron’s contentious pension reforms aimed at gradually raising the retirement age from 62 to 64. Hervé Saulignac, a member of the Socialist party, remarked that his party had “done its duty” by preventing a situation where France would operate without a budget, which he suggested would only exacerbate the existing challenges faced by citizens.
Financial Goals and Challenges
Lecornu described the newly approved budget as a “breakthrough,” projecting an increase in defence spending by €6.5 billion. Although the government aims to reduce the budget deficit to 5% of GDP by 2026—down from 5.4% in 2025—there are concerns regarding the feasibility of this target. Right-wing rapporteur Philippe Juvin noted that the abandonment of pension reforms has hindered efforts to achieve a more ambitious deficit reduction goal of 4.6%.
The protracted negotiations surrounding the budget have dominated the political landscape in France for nearly two years, following Macron’s unexpected call for a snap election in June 2024. This election resulted in a hung parliament, with a left-wing coalition securing the most seats but failing to achieve a majority. The far-right National Rally emerged as a significant force, complicating the governance landscape for Macron’s centrist party, which lost ground during the election but remains influential.
Political Instability and Future Aspirations
The political climate in France has been marked by instability since the election. Macron’s initial appointment of right-wing politician Michel Barnier as Prime Minister lasted only three months before he was ousted amid fiscal disputes. François Bayrou, his successor, faced a similar fate after just nine months, leaving Lecornu, a close ally of Macron, to navigate the budgetary impasse.
Lecornu’s aspirations to maintain his position until the next presidential elections in 2027 hinge on overcoming the current legislative gridlock. His government is eager to shift focus from budgetary concerns to pressing domestic issues, including legislation aimed at protecting farmers and improving palliative care.
As the political landscape evolves, upcoming municipal elections next month and the presidential election in spring 2027 loom large. Macron, ineligible for a third term, has turned his attention mainly to foreign policy, advocating for European independence from external powers and taking a firmer stance against US tariffs and international tensions.
The Shadow of Far-Right Politics
Amidst these developments, Marine Le Pen, leader of the far-right National Rally, is currently embroiled in legal battles concerning her previous conviction for embezzlement related to European Parliament funds. Although she faces a five-year ban from holding office, Le Pen is appealing her conviction, positioning herself as a potential candidate for the 2027 presidential election.
Why it Matters
The passage of France’s budget not only signifies a crucial moment for the country’s immediate economic stability but also reflects the fragile dynamics of its political landscape. As the government grapples with internal dissent and external pressures, the outcome of this budget could have far-reaching implications for France’s governance and its role within the European Union. The developments could either stabilise a government beset by challenges or further entrench the political divisions that characterise contemporary French society. As the nation prepares for significant electoral events, the decisions made today will undoubtedly shape the future of its political and economic landscape.