French lawmakers voted unanimously against the government's budget plans for 2027, which aimed to cut spending by 54 billion euros ($61.8 billion) to address a growing deficit and appease bond market concerns. The rejection reflects the challenges faced by Prime Minister Sebastien Lecornu's government in a fragmented National Assembly, where no single party holds a majority.
Since the 2024 snap election resulted in a hung parliament, the government has relied on Article 49.3 of the constitution to push budgets through without a vote, although this has led to threats of no-confidence motions. The current budget deficit stands at 5.1% of GDP, and the national debt is at 115.6% of GDP, raising alarms among investors.
Protests have erupted across France, initially sparked by student demonstrations over education funding, escalating into widespread unrest and significant property damage estimated at over 1 billion euros ($1.1 billion).
Analysts suggest that the government's next steps may involve invoking special powers to pass the budget without parliamentary approval, although they express skepticism about achieving the targeted deficit reduction due to weak economic growth. The outlook for France remains challenging, with low confidence and domestic demand, but experts do not foresee an imminent collapse of the economy