Mujtaba Rahman is the head of Eurasia Group’s Europe practice. He tweets at @Mij_Europe.
When French President Emmanuel Macron reappointed his ally and confidante Sébastien Lecornu as prime minister, he was widely accused of being obstinate and out of touch. Coming just four days after Lecornu’s resignation, the decision turned out to be a prelude to the most humiliating U-turn of Macron’s eight years in the Elysée Palace.
On Tuesday, Oct. 14, Lecornu announced he’d suspend the only significant domestic reform of the president’s second term — the gradual increase in France’s official retirement age from 62 to 64. A costly concession that will increase French social spending by €2 billion over two years, it was demanded by the Socialist swing group in the country’s National Assembly as their price for allowing Lecornu’s survival, so that he can negotiate a deficit-cutting budget.
The prime minister’s concessions didn’t stop there. He also promised the Socialists he’d moderate the pain of deficit cuts next year, and that he’d allow the much-splintered assembly and senate to negotiate the final details of the 2026 budget without using the government’s power to impose its choices under Article 49.3 of the constitution.
But by offering to set aside his guillotine powers, Lecornu has bought time at the expense of infinite complication.
Despite his huge giveaways, Lecornu barely survived two no-confidence votes, which were supported by the far right and part of the left, by only 18 votes. Sixty-nine Socialists, with 7 exceptions, stood aside, warning they’d shift their pivotal weight to bring down the government unless its draft 2026 budget was reshaped to their liking — take that as code for fewer spending cuts and big tax increases on big business and the wealthy.
This isn’t where the bad news ends for Lecornu: During the first two days of negotiations in the National Assembly’s finance committee, an unholy alliance of left and far right added another €9 billion to next year’s deficit. The amendments — numbering more than 1,500 in total — also included a radical reversal of the government’s plan to freeze income tax bands next year.
So, for the moment, France seems likely to avoid the threat of a snap parliamentary election, which could bring the far-right National Rally party to power. But the budget crisis remains far from resolved.
Without the government’s magic wand to shorten debate, each line of the budget — actually two budgets, both government and social security — will now be the object of intense haggling between the governing center, a divided left and a bloody-minded far right.
The 2026 budget draft sent to the assembly follows the broad lines drawn up by Lecornu’s predecessor, François Bayrou — though the new prime minister describes it is a “point of departure.” And if they can agree on anything, the two houses of parliament will have the final word.
National Rally is anti-tax and pro high social spending — save on immigrants. Whereas center-right leader Bruno Retailleau, who has been increasingly hostile after leaving the government earlier this month, has called on his deputies to reject the budget outright unless all tax rises are kept to a minimum. Meanwhile, the Socialists will have a hard time swallowing the proposed spending cuts in the budget draft.
No doubt the left will also try to revive the so-called Zucman tax — a 2 percent annual levy on all fortunes above €100 million. And while the government may tactically agree to some increases in taxes on the wealthy next year, it will face fierce opposition on the matter from the center right and even its own centrist camp.
There is, however, room for compromise.
Lecornu has conceded in advance that the deficit target for 2026 can be softened to “below 5 percent of GDP” instead of the 4.7 percent in the draft budget. This means any budget that emerges is likely to disappoint France’s creditors, the rating agencies and the European Commission. And without Article 49.3, the result will likely be a “Frankenstein budget” with little fiscal logic — or no budget at all.
Still, Lecornu has another constitutional weapon, or threat, on his side. If no opinion is given by parliament within 70 days, or in 50 days for the social security budget, the government has the right under the constitution’s Article 47 to impose a version of its original budget by decree.
This outcome has never been used before — and Lecornu would almost certainly be censured and toppled if it were to happen.Yet, some veteran parliamentary insiders are regarding it as increasingly likely, which suggests France’s political and fiscal crisis is far from over.
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