2026 French Budget Debate Begins Amid Political Uncertainty and Credit Downgrades
France faces a historic 2026 budget debate without a parliamentary majority amid political divisions and a recent credit rating downgrade.
- • First budget debate without a governing majority since 1958
- • Government abandons Article 49.3, complicating budget approval
- • Around 1,800 amendments submitted for 2026 finance bill
- • Left aims to reintroduce wealth tax; right opposes tax hikes
- • France’s credit rating downgraded due to fiscal uncertainty
Key details
For the first time since 1958, the French National Assembly is set to debate the 2026 budget without a governing majority, marking an unprecedented challenge for the government. Furthermore, the government has renounced the use of Article 49.3 of the Constitution, which previously allowed budget approval without a parliamentary vote, adding complexity to the budget's passage.
The initial examination of the finance bill, focusing on state revenues, will start in committee with approximately 1,800 amendments submitted. Political groups have pledged not to obstruct the process to meet constitutional deadlines but are poised to push their own agendas. The left, led by the Socialist Party (PS), aims to overturn the freeze on social benefits and reintroduce the Zucman tax on high wealth. However, former President and PS deputy François Hollande expressed skepticism about the chances of such proposals passing in their current form. La France Insoumise, led by Finance Committee president Eric Coquerel, holds a more critical stance and seeks to reject the budget entirely, while the right-wing Les Républicains oppose tax increases and advocate for cutting public spending.
The National Rally (RN) is taking a surprisingly neoliberal approach compared to last year and may propose eliminating state medical aid for undocumented migrants, sparking contention. The government, meanwhile, urges compromise to avoid budget failure, with Finance Minister Amélie de Montchalin warning that failure to pass the budget would indicate a significant collective failure.
Adding to the tension is the recent downgrade of France's credit rating by S&P Global Ratings, citing "high uncertainty" around public finances amid rising debt vulnerability. The ongoing debate also involves the suspension of pension reforms, with concerns raised that the government might use amendments or executive orders to bypass thorough parliamentary debate.
Government spokespersons deny any hidden plans to circumvent democratic processes, but opposition parties remain cautious. Overall, this budget debate poses both political and economic risks, highlighting unique challenges for France's governance and fiscal stability in 2026.