The crisis is over. France does not yet have a state budget for this year but it will soon.
The Prime Minister, Sébastien Lecornu, was given little chance of survival, let alone finding a budget deal, when he was appointed for a second time in October.
He deserves some credit for backing the heavy truck of the French political system out of a cul-de-sac (English for voie sans issue).
Otherwise, what have we learned?
That France still refuses to face up to a deficit crisis a half-century in the making; that there can be no serious attempt to address the problem before the 2027 presidential election; and that any presidential candidate who asks the country honestly to confront its €3.2 trillion debt mountain appears doomed to fail.
To pass a 2026 budget, Lecornu had to cast aside almost anything that resembled a sacrifice for poor, middling or rich voters.
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The abolition of two bank holidays proposed by his predecessor, François Bayrou? Outrageous. An increase in the small public contribution to the cost of medicines? Unthinkable.
A freeze in the inflation-linking of income tax bands for one year? A disgrace. Making rich pensioners pay more tax? Abominable.
To be even allowed to start a negotiation in October, Lecornu was forced to pause the only significant, deficit-cutting reform of President Emmanuel Macron’s second term. He surrendered to the blackmail of the Socialists and halted the gradual increase in the official retirement age from 62 to 64.
The country was obliged to take a step back before it took half a step forward.
The Socialists’ pet idea for solving the deficit problem – an ill-thought-out tax on all capital holdings – was also rejected. The final compromise involves no new taxes for families or individuals; a slight cut in real-terms state spending, except on defence; and the extension of a “one-year” punitive surtax on big business (the 320 companies with a turnover of more than €1.5 billion).
Instead of cutting the deficit from 5.3 percent of GDP 4.7 percent this year as originally proposed, the budget projects a deficit of 5 percent. It is unlikely that France will honour its pledge to respect the Eurozone target of 3 percent of GDP deficit by 2029.
To do so France will have to reduce its deficit by twice the rate of this year for each of the next three years – one of them an election year. It is not going to happen.
The original budget plan promised that French state debt would be restricted to 117.9 percent of GDP by the end of this year. The final budget projects a year-end deficit of 118.2 percent.
The original budget plan promised that most deficit-cutting would be achieved by spending cuts, In the final version (taking the social security and state budgets together) 60 percent of the effort comes from tax hikes, mostly from the €7.3 billion hit on big business.
Lecornu pushed through the social security budget by a “normal” parliamentary vote in December. He promised to do the same for the main state budget. He finally admitted last week he had no hope of achieving a majority in an Assembly split into three blocs and 11 groups.
The Far Right and Hard Left disrupted the budget negotiations from the start in the hope of toppling a fourth government in 12 months. The Socialists demanded extra spending for health and education; the centre right wanted no tax increases for “ordinary” voters or taxation of rich pensioners.
Even when they got much of what they wanted, they refused to vote for the budget. They urged Lecornu to break his word and use his constitutional joker – Article 49.3 of the constitution which allows a government to push through legislation without a “normal” vote.
So long as they got part of what they wanted, the Socialists and the centre-right promised to ignore the inevitable censure votes from the Hard Left and Far Right.
That way, they wouldn’t have to “vote for” the budget; they wouldn’t have to vote at all. Only “yes” votes are counted for censure motions.
Isn’t that organised hypocrisy? Yes, but that is why Article 49.3 exists.
Lecornu gave way. He survived two censure motions, from Hard Left and Far Right, on the taxation side of the budget last Friday. He survived two more on the expenditure side on Tuesday. The budget will go to the right-wing dominated Senate on Thursday. They will reject it as too tax-heavy,
The National Assembly has the final word. Lecornu will use 49.3 again on Friday and there will be a final vote next week. Two more censure motions will be rejected and the 2026 budget will pass.
Lecornu deserves credit for his unusual blend of tenacity and humility. His predecessors, Michel Barnier and François Bayrou, fell because they tried to impose much tougher budgets. Their stubbornness was justified. Their inflexible tactics were suicidal.
Lecornu, unusually for France, is a politician more driven by results than ideology or image. He claims that the final budget is “better” than the original proposals. He knows that it is a mess. It is better only because it is better than no budget at all.
Before accepting the premiership a second time, Lecornu demanded and received freedom to negotiate from President Emmanuel Macron. Some of his concessions were humiliating but they rescued a semblance of order for Macron’s final year.
Lecornu will now, I believe, remain PM until the April-May 2027 presidential election. What are his chances of emerging as a strong, centrist contender to replace Macron? Not very high. No sitting French prime minister of the Fifth Republic has ever won the presidency.
He is only 39 years old. His time may come.
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