France Faces Budget Impasse, Risks Higher Deficit in 2026

In teh absence of a budget compromise, Sébastien Lecornu will resort to a special law, a temporary measure intended to ensure the continuity of the State in 2026. if enacted for the entire year-though that is not its intended duration-this regime could further increase the public deficit, potentially reaching 5.5% of GDP next year.

As in 2025, France will begin 2026 without a finalized budget. While the Social Security finance law was definitively adopted this week, deputies and senators failed to reach an agreement on the state budget Friday, making it impossible to promulgate a text before December 31, as required by the Constitution.

To maintain state operations despite the impasse, Sébastien Lecornu will submit a special bill to the Council of State. This technical measure serves as a budgetary stopgap, simply carrying over the 2025 appropriations to the following year and authorizing tax collection, without introducing new taxes.

Towards a Deficit of 5.5% of GDP?

“The special law is not a budget; it is a minimum service that cannot continue without serious consequences for the country and the French people,” warned the Minister of Public Accounts, Amélie de Montchalin. in an interview with La Montagne, she explained that with such a measure, the country “will not invest,” will not launch new projects, and cannot, for example, “initiate additional rearmament.”

“This is not good news,” reacted Éric Heyer, director of the analysis and forecasting department at the OFCE, on BFM Business. Because even if the special law slows spending, it “will not allow us to achieve enough savings to meet our commitments to Brussels and remain below, or at least at a minimum, a 5% deficit.”

“With the special law, the deficit should exceed 5% of GDP. It is not the end of the world, but it will put us in difficulty,”