Jumble of tax proposals snarls up France’s painful budget process
Counting every cent
French budget talks have been bogged down by a volley of contradictory amendments aimed at raising taxes on the rich, heightening the risk of the bill running aground as the country’s parliament runs out of time, writes Sarah White.
Context: Talks in France’s lower house as part of a new budget for next year have become increasingly messy, complicating Prime Minister Sébastien Lecornu’s attempts to forge an agreement in a fragmented parliament to trim the country’s deficit.
Yesterday, lawmakers were racing their way through hundreds of proposed fiscal amendments before they pivot to tackle the welfare budget for 2026 and eventually move on to spending cuts.
But even on the tax segment alone, Lecornu’s plea to opposition parties to work together appears to be falling flat, as lawmakers from across the political spectrum have added amendments with little cohesion.
A new 2 per cent tax on holding companies proposed by Lecornu to appease the left was watered down; a property tax created by President Emmanuel Macron when he abolished a wealth tax in 2017 was amended to include yachts but no longer applies to main residences; and a form of exit tax on fiscal exiles that Macron had abolished was restored.
Over the weekend, economy minister Roland Lescure warned of “fiscal sorcery”, suggesting that some of the measures may not be constitutional — even as some opposition parties already claim victory over various taxes.
The chaos means that getting the budget through the Assemblée Nationale and the senate before Christmas, on what was already a narrow timetable, is looking increasingly out of reach.
If the deadline lapses without a deal — or if the budget is rejected by warring lawmakers — France may be back where it started early in the autumn when Lecornu became the country’s third prime minister in a year: in crisis mode.
The prime minister has the option of ultimately passing his original proposed €30bn package of spending cuts and tax rises via decrees. But that “nuclear” option, parliamentarian specialists say, would incense the parties he has fought hard to win over, including the Socialists who have tacitly supported Lecornu until now.
Socialist party leader Olivier Faure said last night his party was willing to give Lecornu more time. He told BFMTV he saw a “narrow path” to agreeing a budget before the year-end.