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A joint committee of French lawmakers on Friday failed to reach a compromise on the state budget for next year, parliamentary sources said, meaning France would not have a 2026 budget by year end.<\/p>\n
The 2025 budget is now likely to be carried over into the new year as debates continue in both chambers.<\/p>\n
“Parliament will therefore be unable to vote on a budget for France before the end of the year,” Prime Minister Sebastien Lecornu said on X after senators and members of the lower house could not agree.<\/p>\n
France, the eurozone’s second-largest economy, is under pressure to rein in its deficit and soaring debt, but efforts have been hampered by political deadlock.<\/p>\n
Lecornu was named in September — then renamed the following month after stepping down — after his two predecessors were both toppled by parliament over cost-cutting measures.<\/p>\n
He had pledged to pass a budget by the end of the year, but not use a constitutional power to ram it through without a parliament vote, as done in previous years.<\/p>\n
In a win for Lecornu, lawmakers on Tuesday narrowly adopted the social security budget, part of the broader spending plan, postponing an unpopular pensions reform until 2028.<\/p>\n
But they have been unable to pass the state budget, which has been complicated by a tug of war between the right-leaning Senate that wants to cut costs, and a hung lower house in which the left has demanded more tax income.<\/p>\n
– ‘Special law’ –<\/p>\n
Lecornu said he would from Monday bring together “the main political leaders to consult them on the way forward”.<\/p>\n
Lecornu’s team told AFP the government would be seeking to pass a so-called “special law” to temporarily carry over the 2025 budget into the new year while debates continue.<\/p>\n
The special law would allow the state to continue collecting taxes after January 1, effectively enabling it to keep paying civil servant salaries.<\/p>\n
But central bank governor Francois Villeroy de Galhau Friday warned this was only a short-term solution.<\/p>\n
If France keeps its 2025 budget into next year, it would lead the country to a “deficit far higher than desired”, he told France Inter radio.<\/p>\n
Political gridlock also delayed adoption of France’s 2025 budget, with a spending plan approved in February after then-prime minister Francois Bayrou forced it through the lower house.<\/p>\n
France has been battling a deep political crisis since President Emmanuel Macron called snap elections last year that were intended to consolidate his power but instead resulted in a hung parliament and gains for the far right.<\/p>\n
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