France adopts its 2026 government budget

DW
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Prime Minister Sebastien Lecornu’s minority government enacted the 2026 budget using constitutional powers after surviving two no-confidence motions in the National Assembly.
France adopts its 2026 government budget
A What happened
The budget was adopted on Monday after months of negotiations and repeated no-confidence attempts against Lecornu’s government. Lecornu said the compromise curbs public spending and does not raise taxes for households and businesses. Two no-confidence votes failed to reach the 289-vote threshold needed to topple the government in the 577-seat National Assembly. The adopted text targets a reduction of the budget deficit to 5% of GDP and includes higher taxes on some businesses.

Why it matters

  • Fiscal policy is now set for 2026: With the budget enacted, the government can proceed with planned spending limits and deficit-reduction measures rather than operating under temporary funding arrangements.

  • Executive tools substituted for a full parliamentary vote: Using constitutional powers to pass the budget underscores the government’s limited legislative support and keeps future major fiscal measures vulnerable to renewed no-confidence pressure.

  • Business tax burden becomes more uneven: Targeted tax increases on some firms shift part of the adjustment onto specific sectors, creating differentiated cost impacts across the corporate landscape.

Topics

Business & Markets Economy World & Politics Policy & Regulation Governance

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