Arya News - New budget includes a $7.6m military spending increase and aims to cut the deficit to 5 percent by the end of 2026.
France has passed a budget for 2026 after two no-confidence motions failed, allowing the legislation to pass and potentially heralding a period of relative stability for Prime Minister Sebastien Lecornu’s weak minority government.
The budget, adopted on Monday after four months of political deadlock over government spending, includes measures to bring France’s deficit down and boost military spending.
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list of 3 items list 1 of 3 Why Japan’s economic plans are sending jitters through global markets list 2 of 3 Guterres warns UN faces ‘imminent financial collapse’ list 3 of 3 India’s budget bets on infrastructure, manufacturing amid global trade war end of list “France finally has a budget,” Lecornu said in a post on X. “A budget that makes clear choices and addresses essential priorities. A budget that contains public spending and does not raise taxes for households and businesses.”
Motions tabled by France Unbowed, the Greens and other left-wing groups drew 260 of the 289 votes needed to oust the government. The far-right motion secured only 135 votes.
The results appear on a giant screen of the first vote on no-confidence motions against the 2026 finance bill [AFP] 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.
Reducing the deficit
France is under pressure from the European Union to rein in its debt-to-GDP ratio – the bloc’s third-highest after Greece and Italy – which is close to twice the EU’s 60-percent ceiling.
The bill aims to cut France’s deficit to five percent of gross domestic product (GDP) in 2026 from 5.4 percent in 2025, after the government eased back from an earlier target of 4.7 percent.
The budget includes higher taxes on some businesses, expected to bring in about 7.3 billion euros ($8.6bn) in 2026, though the Socialists failed to secure backing for a proposed wealth tax on the superrich.
It also boosts military spending by 6.5 billion euros ($7.7m), a move the premier last week described as the “heart” of the budget.
The Socialists did, however, win several sought-after measures, including a one-euro meal for students and an increase in a top-up payment for low-income workers.