French Parliament Rejects 2027 Budget Revenues, Raising Deficit Concerns Amid Social Unrest

The French Parliament's Finance Commission decisively rejected the revenue section of the 2027 State budget, escalating concerns over a growing budget deficit and increasing social and political tensions. The vote saw 31 members against, 3 in favor, and 2 abstentions, with only the ruling Ensemble pour la République (EPR) group supporting the draft budget. This rejection signifies a major setback for the French government as it grapples with economic pressures.

Approximately 1,800 amendments were proposed during the parliamentary process, with over 200 adopted. Key amendments included maintaining current tax relief on pensions, exemptions for daily allowances related to long-term illnesses and workplace accidents, and raising the digital services tax from 3% to 15%. The rejection contributed to an anticipated increase in the public deficit, now projected between 5.35% and 5.4% of GDP, rising from the government's initial target of 5%. This translates to a revenue loss of about €9.6 billion.

The budgetary impasse places France amid mounting financial challenges. As noted by Nicolas Baverez, a renowned economist, France's national debt has surged to €3.6 trillion—119% of GDP—the highest since 1946. Interest rates have climbed above 5%, and the spread compared to Germany has widened to 150 basis points, reminiscent of Italy's 2011 debt crisis. Baverez warns that France is on the "brink of chaos," with a confluence of financial, social, and political crises threatening the nation’s stability within the eurozone. He criticizes French leadership for relying on external institutions such as the IMF and the EU rather than addressing domestic fiscal problems.

The political stalemate also coincides with renewed social unrest. A student and professional union coalition has called for new nationwide mobilizations on October 13, reflecting ongoing youth protests against the government's fiscal policies and amplifying pressures on the executive branch.

Despite the commission’s rejection, the budget's “revenues” section is set to return to the full assembly on Tuesday, October 13, in its original form for further debate, with the final vote expected October 20. The government faces a critical window to reconcile fiscal discipline with political consensus, against the backdrop of rising public dissent and economic vulnerability.