Budget debate opens without a majority

The National Assembly began examining the 2027 finance bill on Tuesday, 13 October, with the government aiming for a deficit of 5% of GDP next year. Adoption looks uncertain because the government lacks a parliamentary majority, and a presidential election is due next year. Prime Minister Sébastien Lecornu has not ruled out using article 49.3 of the Constitution, which lets a government pass a budget without a vote unless a censure motion is adopted. On 17 September he offered La France insoumise an end to parliamentary obstruction in exchange for a pledge not to use 49.3 or ordinances. In early October, reports said the prime minister favoured 49.3 for lack of agreement with the opposition.

Government presses for a budget by year end

Roland Lescure, the minister of economy and finance, told deputies the government was entering the debate "in a spirit of compromise", provided the fiscal framework was respected.

“We need a budget by the end of the year, and not at the start of next year as with the previous two.”

Lescure said the 5% deficit target had to remain a fixed point for the debate. He described the bill as bringing new efforts totalling 43 billion euros, with spending falling in volume once debt interest and defence are excluded, something he said had not been seen since the end of Covid support. The text contained no general tax increase and relied instead on trimming tax breaks. Budget minister David Amiel called the bill a "safeguard budget" meant to stop the country going off the rails. He accused the finance committee of having virtually worsened the public deficit by 8 billion euros the previous week.

Central bank and IMF warnings

Emmanuel Moulin, who has led the Banque de France since June, spoke at the IMF annual meetings in Bangkok on Wednesday, 14 October. He said neither the ECB nor the Banque de France could do much about the parliamentary process and pointed to constitutional tools that allow a budget to pass without a majority.

“Parliamentarians and the executive must take their responsibilities.”

Moulin cited 49.3 and article 47, which allows the government to put budget provisions into force by ordinance. IMF managing director Kristalina Georgieva said France was seeking a budget that would put its deficit and debt on a downward path, but that it would take time before they reached levels that inspire confidence among the public and investors. Her remarks came as France's ten-year borrowing rate approached 5%. Rodrigo Valdes, an IMF official, told Bloomberg that France must ensure "timely approval" of its budget to preserve credibility and market confidence.

2027 deficit target5

2029 deficit (below)3

2027 deficit target

5 % of GDP

2029 deficit (below)

3 % of GDP

Data from the article text

Debt and market pressure

Public debt is at its highest level since 1946. Speaking to senators on 13 October, Lescure said rising interest rates were alarming but that France was not caught in a snowball effect, and he asked deputies to find a compromise with the executive. The multi-year public finance path annexed to the 2027 bill also reaffirms a goal of a deficit below 3% of GDP by 2029. Whether the budget is adopted before year end remains open, and the government has not excluded 49.3.