France Approves the 2026 Budget Despite Parliamentary Crisis

The approval of the 2026 budget marks a crucial turning point in French fiscal policy after weeks of institutional uncertainty. The French Parliament finally endorsed the budget plan in early February, allowing the government to avoid collapse and for markets to regain some confidence in the country’s economic stability.

Critical Votes Define France’s Fiscal Future

The battle for the approval of the 2026 budget was fought on two simultaneous parliamentary fronts. The no-confidence motions aimed to overthrow Le Corny’s minority government, but both failed in their objectives. The far-left motion received 260 votes, significantly below the 289 needed to oust the executive. Almost simultaneously, the far-right attempt garnered only 135 votes, cementing the failure of both political blocs to block the government’s measures.

These results revealed deep cracks in the French parliamentary landscape, where no faction has enough strength to impose its agenda unilaterally. The government took advantage of this fragile balance to negotiate and adjust the 2026 budget, making strategic concessions that helped soften parliamentary opposition.

Budget Concessions and Their Impact on the Deficit

To secure legislative support, Le Corny and his cabinet implemented significant modifications to the original 2026 budget. Spending cuts were less aggressive than planned, while tax increases were reduced compared to previous proposals. These concessions resulted in a projected fiscal deficit of 5%, exceeding the initial target set by the government.

This level of deficit poses an ongoing challenge for French fiscal policy, especially considering the consolidation standards expected by European institutions. The 2026 budget thus reflects a compromise between the austerity demanded and the political reality of a fragmented parliament.

Political Stability as a Key Factor for Markets

The approval of the 2026 budget provides some institutional stability after months of turbulence that had eroded international investor confidence. Le Corny managed to avoid the fate of his predecessors, who were forced to resign when faced with irreconcilable disagreements with the National Assembly over austerity measures. This government continuity, though fragile, represents a relative victory that prevents a new political crisis.

However, the fragile nature of parliamentary support suggests that the 2026 budget could face additional challenges during its implementation. Le Corny’s ability to maintain fragile coalitions will determine whether this budget approval consolidates the recovery of confidence or remains as a temporary truce in the French political conflict.