France: 2027 Budget Bill Rejected Unanimously by National Assembly

15:50

France’s 2027 budget plans have suffered a major setback after the National Assembly rejected the government’s draft finance bill at first reading, highlighting the political difficulties facing the executive as it attempts to secure parliamentary approval for its economic programme.

The rejection took place on Wednesday evening, following nearly ten days of intense discussions marked by disagreements between the government and opposition lawmakers. The revenue section of the bill, which had undergone substantial amendments during parliamentary debates, was defeated by 458 votes, with no votes in favour and two abstentions.

The outcome reflects the fragmented political landscape within the French Parliament, where the absence of a clear governing majority continues to complicate the legislative process. It also raises fresh questions about the government's ability to pass the 2027 budget within the expected timeframe.

A Challenging Path Towards Fiscal Consolidation

In its original version, the finance bill set an ambitious target of reducing France’s public deficit to 5% of gross domestic product in 2027, compared with an estimated 5.4% in 2026.

To achieve this objective, the government had proposed approximately €43 billion in savings, forming a central component of its strategy to restore public finances and contain spending.

However, the extensive changes introduced during discussions in the National Assembly significantly altered the original proposal, ultimately contributing to its rejection.

Senate Examination Expected in November

The bill is now set to move to the Senate, where examination is scheduled to begin on November 20. The government is therefore looking towards the upper chamber and subsequent parliamentary stages to find a way forward.

Following the vote, the Prime Minister’s office indicated that negotiations should take place after the Senate's examination, suggesting that December could become a decisive period for reaching an agreement between the government's initial proposal and the Senate's version.

The legislation is expected to return to the National Assembly for another reading, creating a further opportunity for political groups to negotiate potential compromises.

Government Faces a Possible Alternative Procedure

If parliamentary negotiations fail to produce an agreement, the government could consider adopting a budgetary ordinance in December. Such a mechanism would allow the executive to establish the budget without securing approval through a conventional parliamentary vote.

This possibility highlights the seriousness of the political deadlock surrounding the 2027 finance bill. Beyond the immediate legislative dispute, the outcome will be crucial in determining France's fiscal priorities, spending commitments and efforts to reduce its public deficit.

With the Senate examination approaching, the coming weeks will test the government's capacity to build political support for its economic programme in a deeply divided National Assembly.