France Passes Stopgap Budget Amid Political Deadlock, Deficit Concerns Mount

France’s parliament has approved a temporary 2026 budget to ensure the state can continue operating into January, after lawmakers failed to reach an agreement on the complete financial plan.

The measure, known as a “loi spéciale” or special law, allows the government to keep collecting taxes and borrowing funds without a full budget in place. The law, which was also used at the end of last year, effectively extends the 2025 budget plans into the new year. The Senate is expected to give its approval later on Tuesday.

Prime Minister Sébastien Lecornu resorted to the emergency procedure after lawmakers could not find a compromise on the financial plans on Friday. The deadlock pushes the contentious discussions into the new year and raises further doubts about how France will tackle its deficit.

Last week, the government warned that the agreed-upon sections of the finance bill would only reduce the deficit to 5.3% of gross domestic product in 2026, down from 5.4% this year. Lecornu’s initial plans had targeted a deficit of 4.7%, though he later said the gap should be below 5%.

French public finances are under intense scrutiny from investors and credit rating agencies, with its deficit ranking among the largest in the eurozone.

Lecornu’s minority government has little room to maneuver in a severely fragmented parliament. Budget battles have led to the downfall of successive governments since President Emmanuel Macron lost his relative majority in the snap elections he called in 2024.

Macron told ministers this week that he wants a full budget passed as soon as possible, according to the government spokesperson.

With time running out to build a broad consensus, Lecornu may deploy a constitutional mechanism that allows the government to push legislation through parliament without a vote, a move he had previously pledged to avoid.

This step could secure passage for the 2026 budget if it receives implicit support from Socialist lawmakers. While its use would likely prompt no-confidence motions from the far-right or the hard-left, such attempts would probably fail without the Socialists’ backing.

Parliament is set to resume its debate on the full budget in the week beginning January 5.