On Tuesday, 14 October, the ‘Lecornu II’ administration unveiled France’s draft budget for 2026, which aims to reduce the public deficit from 5.5% of GDP in 2025 to 4.7% in 2026 and bring it under 3% in 2029 in line with France’s commitments to its European partners.
According to the French High Council of Public Finance, the announced savings would amount to €30 billion, that being less than the level envisaged by the ‘Bayrou’ administration in September (see EUROPE 13681/29). Two-thirds of the fiscal effort will have to be borne by controlling public spending, despite the planned increases for defence (+€6.7 billion).
On the revenue side of things, Sébastien Lecornu told the National Assembly that there would be a tax on the richest French citizens’ ‘holdings’ (+€6.5 billion), that the exceptional surtax on the largest companies would be maintained, that tax and social loopholes would be rationalised, that small parcels would be taxed, and that the fight against tax fraud, social security fraud, customs fraud, and public aid fraud would be intensified.
Despite these cost-cutting measures, France’s debt is expected to continue to increase in relation to its national GDP, rising from 113.2% in 2024 to 115.9% in 2025 and 117.9% in 2026.
The French prime minister also announced the suspension—in 2026 and 2027—of the unpopular 2023 pension reform, which had been adopted without a vote in the national Parliament (using Article 49.3 of the French Constitution) in order to push the legal retirement age to 64. Mr Lecornu warned that this suspension would cost €400 million in 2026 and €1.8 billion in 2027 and would be offset by economies. He also announced that he would be abandoning the use of Article 49.3 of the French Constitution in his approach to government.
These two measures could make it possible for the French government—the fourth administration since the June 2024 legislative elections—to avoid being censured by the Socialists.
See France’s draft budget for 2026 (in French): https://aeur.eu/f/iyh (Original version in French by Mathieu Bion)