French National Assembly rejects income provisions of 2026 budget

(MENAFN) The French National Assembly delivered a major setback to the government’s 2026 budget on Saturday by overwhelmingly rejecting its income provisions, deepening uncertainty in a politically divided climate. The revenue section, which includes proposed taxation measures, was voted down 404 to 1 after more than 120 hours of debate in the lower house.

The rejection shifts attention to the Senate, which is expected to strip out many amendments adopted by deputies, further complicating the budget process. Finance Minister Roland Lescure sought to reassure both lawmakers and markets, saying “we are only halfway through the parliamentary process” and expressing confidence that a cross-party compromise remains achievable.

“I remain convinced that the majority of parliamentary groups will be able to find the necessary common ground to enable our country to have a budget,” he added.

France faces growing pressure from investors to curb its expanding deficit, a challenge made more difficult since President Emmanuel Macron lost his absolute majority in last year’s snap elections. Previous budget conflicts contributed to the fall of former Prime Minister Michel Barnier’s government.

Prime Minister Sebastien Lecornu earlier vowed not to invoke special constitutional powers, including Article 49.3, to force the budget through. While this gives lawmakers unusual leeway to amend the bill, it also increases the risk of a legislative stalemate.

The stance of the Socialist Party will be pivotal in the coming days, as their decision to reject or abstain hinges on the government’s offer to suspend a controversial pension reform to secure their support. Once the Senate completes its review, a cross-party joint committee is expected to negotiate a compromise version of the budget.

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