French Parliament Prepares Special Budget Law Amid 2026 Finance Bill Deadlock

Following the failure to pass the 2026 finance bill, the French Parliament is gearing up to rapidly adopt a special budget law as a temporary measure to maintain state financing. This law will allow the government to collect existing taxes without introducing new fiscal measures and will restrict spending to essential services already approved in the previous year. Prime Minister Sébastien Lecornu, who acknowledges the deadlock in parliamentary budget negotiations, has begun consultations with key political leaders to seek solutions. A council of ministers meeting is scheduled for Monday to validate the special law before it is debated in the Assembly, with votes planned Tuesday evening in both chambers.

The special law serves as a stopgap to ensure continuity but lacks a genuine budgetary framework. Public Accounts Minister Amélie de Montchalin emphasized that France must establish a "real budget" by the end of January 2026 to move beyond temporary financing. She indicated that the upcoming finance law will likely include some tax increases though specifics remain undisclosed. Amid a fragmented Parliament, ongoing political debates raise concerns about institutional gridlock, particularly against a backdrop of economic slowdown and market pressure on budget plans.

The right-wing opposition urges Lecornu to use the constitutional Article 49.3 to expedite budget approval, a tool that would bypass parliamentary vote, while Philippe Juvin advocates a two-step approach combining the special law with potential future use of 49.3. Lecornu might also consider pushing the budget through ordinances, a novel and constitutionally complex method.

This temporary law follows precedents like the social security budget, which passed with Socialist Party support but involved concessions on pension reforms. The government aims to protect public services and French citizens while navigating a complex parliamentary landscape to restore France's fiscal stability.