PARIS — On Monday, the French state budget for 2026 was officially enacted by parliament, concluding a prolonged period of deadlock that had heightened concerns about a potential debt crisis in the EU’s second-largest economy.
After extensive cross-party discussions failed to achieve agreement, center-right Prime Minister Sébastien Lecornu invoked a constitutional provision enabling the government to pass legislation without parliamentary approval. However, this action permits lawmakers to propose no-confidence motions, which could result in the bill’s rejection and require the government to resign if passed.
Lecornu’s minority government overcame several no-confidence challenges introduced by left-wing and far-right factions. His success was due to the center-left Socialist Party’s decision not to align with their former leftist allies against Lecornu, in exchange for government agreements such as €1 meals for university students.
Initially, Lecornu aimed for a budget to reduce France’s 2026 deficit to 4.7 percent of GDP, but concessions to various political groups increased this to around 5 percent of GDP, according to the government’s latest estimates.
To prevent a U.S.-style government shutdown after failing to conclude fiscal plans before the new year, the previous year’s budget was extended into January. The 2026 budget is anticipated to be implemented shortly, pending approval from France’s Constitutional Court, which will soon conduct a standard legal review.
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