France 2026 Budget Passes After Government Survives Confidence Votes

The France 2026 budget has officially passed after Prime Minister Sébastien Lecornu’s government survived two high-stakes no-confidence votes in the National Assembly. This marks the end of a prolonged fiscal standoff and resets France’s political agenda for the year.

The breakthrough came after Lecornu invoked Article 49.3 of the French Constitution, which allows the executive to pass the budget without a parliamentary vote—unless a no-confidence motion succeeds. Both opposition-led motions failed to secure enough support, ensuring the budget’s adoption and solidifying Lecornu’s position, at least temporarily.

Neither the left nor the far-right could rally the broader center to their side. Key abstentions and tactical neutrality from conservative and socialist deputies allowed the government to survive by a slim margin. The use of 49.3 remains controversial, especially in a legislature still fractured by the 2024 snap elections, which produced no clear majority. Yet the tactic proved effective in pushing through the overdue fiscal legislation.

With the France 2026 budget now enacted, attention turns to its content. The government aims to reduce the deficit from 5.4% to roughly 5% of GDP—still above the EU’s 3% target but a meaningful correction under current constraints. The budget relies on several fiscal tools: continued windfall taxes on large corporations, a 20% levy on ultra-high-value assets, and modest public spending cuts.

However, sharp austerity was avoided. Defense spending is the standout winner, with a €6 billion increase focused on equipment modernization—submarines, armored vehicles, and cyber capabilities. Internal security and justice budgets also saw protection from cuts.

Behind the scenes, this budget deal was made possible by strategic trade-offs. Lecornu paused divisive reforms, including proposals to raise the retirement age—moves that had sparked mass protests and political resistance in prior years. In return, moderate left and center-left lawmakers dropped or softened their opposition, defusing the immediate crisis.

The political optics matter here: by neutralizing radical threats without caving on core fiscal objectives, the government reinforced its legitimacy despite lacking a majority. That said, the underlying fragmentation remains. France’s political landscape is still unstable, with three prime ministers in under two years and more volatility likely ahead of the 2027 presidential race.

Markets welcomed the outcome. Bond spreads tightened as investors responded to reduced political risk and clearer fiscal direction. But the longer-term viability of the France 2026 budget will depend on growth, implementation, and whether Lecornu can keep both parliament and the street quiet until reforms return to the table.