French 2026 Budget Talks Stall Amid Senate Resistance and Rising Public Debt

The French government's effort to finalize the 2026 budget remains deadlocked, as tensions flare between government officials and right-wing senators (LR) in the Commission Mixte Paritaire (CMP). The government specifically blames the LR senators' refusal to accept a proposed surtax on corporate taxes, which could have generated 6 billion euros, for the budget impasse. Meanwhile, the socialists have demanded an additional 10 billion euros in revenue to fund increased public spending.

The Senate is pressing Prime Minister to invoke article 49.3, aiming for a less tax-intensive version of the budget. An LR senator criticized the Prime Minister's lack of consultations and savings proposals, while internal divisions within the right-wing are intensifying ahead of the 2027 presidential elections, with accusations against LR leader Bruno Retailleau for pushing a hardline stance.

Compounding the political stalemate, France’s public debt reached a record 3,482 billion euros in the third quarter of 2025, equating to 117.4% of GDP—a rise of nearly 66 billion euros compared to the previous quarter. Projections warn the debt ratio could surpass 120% by 2027, potentially overtaking Italy's declining but still higher debt load.

The CMP, consisting of seven deputies and seven senators, continues its attempt to reconcile budget differences and find deficit reduction measures. However, the Senate refuses to accept responsibility for the 4.5 billion euros shifted from state funds to partially cover social security deficits, and a perceived tit-for-tat dynamic persists following recent pension reform suspensions supported by LR deputies.

As the year closes, France faces both heightened political discord and increasing fiscal pressures, underscoring the challenges in crafting a sustainable budget amid rigid partisan conflicts and swelling public debt.