Sébastien Lecornu Unveils Compromise Budget for 2026 with Deficit Target of 4.7%
French Prime Minister Sébastien Lecornu announces a compromise budget for 2026 with a deficit target of 4.7%.
- • Prime Minister announces a public deficit target of 4.7% for 2026.
- • Planned increases of 6 billion euros for pensions and 5 billion euros for health care.
- • Rejection of wealth tax and Zucman tax proposals due to economic concerns.
- • Pension reform will not be suspended, as ongoing dialogue with social partners is needed.
Key details
In a significant announcement, French Prime Minister Sébastien Lecornu revealed plans for a compromise budget for 2026, projecting a public deficit of approximately 4.7%. In an interview with *Le Parisien*, Lecornu stated that the budget will be developed from a 'blank slate', emphasizing the importance of consultations with unions, employers, and political parties to address various socio-economic concerns without resorting to austerity measures.
The budget includes a proposed reduction of six billion euros in state expenditures; however, it allocates substantial increases of six billion euros for pensions and an additional five billion euros for health care. This allocation aims to respond to societal demands while maintaining a focus on fiscal responsibility. Lecornu firmly ruled out the suspension of the contentious pension reform initiated by his predecessor, Elisabeth Borne, deeming it incomplete and underscoring the need for ongoing dialogue with social partners to rectify abuses in labor agreements.
Moreover, the Prime Minister dismissed the reintroduction of the wealth tax (ISF) and rejected the proposed Zucman tax, which had been supported by leftist factions, citing concerns that it could adversely affect employment and investment. Lecornu's approach appears aimed at fostering stability while advancing necessary reforms within the country's fiscal landscape.