France adopts budget after premier survives no-confidence votes

PARIS:

France finally got a 2026 budget on Monday, when two no-confidence motions failed, allowing the legislation to pass and heralding a period of relative stability for Prime Minister Sebastien Lecornu's weak minority government.

Budget negotiations have consumed the French political class for nearly two years, after President Emmanuel Macron's 2024 snap election delivered a hung parliament just as a massive hole in public finances made belt-tightening more urgent.

The budget talks have cost two prime ministers their jobs, unsettled debt markets and alarmed France's European partners. However, Lecornu -- whose chaotic two-stage nomination in October drew derision around the world -- managed to secure the support of Socialist lawmakers through costly but targeted concessions, boosting his stature in the process.

"France finally has a budget. A budget that embraces clear choices and essential priorities. A budget that reins in public spending, which does not raise taxes for households and businesses," Lecornu said in a post on X after the no-confidence votes, adding he was submitting the budget to the Constitutional Court to ensure it was compliant with the constitution.

Despite the still-elevated budget deficit of 5% of GDP seen by Lecornu, investors have taken heart in the new stability. The French government debt risk premium over the German benchmark has returned to levels last seen in June 2024, before Macron's snap-election announcement.

Two votes of no-confidence triggered by the hard-left and far right fell short of getting a majority after the Socialists said they would not back them, which means the 2026 budget – already more than a month overdue - is now adopted.