2026 Budget Approved: France Reconsiders Austerity Amid Political Instability

In early February, France reached a critical political turning point when its Parliament ratified the 2026 budget, ending weeks of tension that shook investor confidence. According to Jin10 data, Prime Minister Le Corny managed to overcome a series of no-confidence votes that threatened his minority government, securing a victory that will reshape discussions on fiscal austerity in the country.

Parliamentary Clash: Two Motions Rejected

The National Assembly presented two simultaneous challenges to the government. The motion proposed by the far-left received 260 votes, significantly below the 289 needed to oust the executive. Even less impactful, the far-right initiative garnered only 135 votes, solidifying the government’s stay in power. This result reflects the current fragmentation of the French Parliament, where no bloc holds an absolute majority.

Concessions: A Redefined Austerity

To ensure budget approval, Le Corny was forced to negotiate a reformulation of the proposed measures. Spending cuts were reduced compared to the initial plan, while tax increases were kept below the projected levels. This balance represents a practical reconfiguration of the concept of austerity, no longer solely focused on expenditure reductions but on a more moderate combination of fiscal adjustments. The final outcome projects a deficit of 5%, above the government’s original target.

Recovered Stability and Uncertain Future

The approval marks the end of an era of instability that shook the French markets. Le Corny avoided the fate of his predecessors, who were forced to resign when they failed to reconcile their proposals with the National Assembly’s requirements. However, the approved budget, though less strict in terms of austerity, keeps France on a fiscal adjustment path necessary for its economic recovery.