Published by Global Banking & Finance Review®
Posted on January 19, 2026
4 min readLast updated: January 19, 2026
Add as preferred source on GoogleFrance nears a 2026 budget deal with Socialist support after PM Lecornu's concessions. Key measures include extending corporate surtax and boosting benefits.
By Elizabeth Pineau
PARIS, Jan 19 (Reuters) - France will use special constitutional powers to force a budget for 2026 through parliament, Prime Minister Sebastien Lecornu said on Monday after winning enough political backing for the bill to survive the inevitable no-confidence vote that would follow.
Lecornu said after a cabinet meeting that he planned to invoke article 49.3 of the Constitution to circumvent a parliamentary vote on the finance bill, breaking an earlier promise to abstain from using such powers.
"I am doing it with regret, because I am aware that I am forced to go back on my word," Lecornu told journalists.
Lecornu said he would formally invoke Article 49.3 to pass the income side of the legislation on Tuesday in the lower house before it moves to the Senate.
The move brings closer to a conclusion the centrist government's three-month slog to deliver a deficit-taming budget that moderate opponents could sufficiently stomach to refrain from voting the government out. The government expects the budget to be definitively passed in the first half of February, one official said.
Needing to win support from the Socialists without alienating conservatives, Lecornu had said he would no longer cut a tax rebate on pensions, and that a monthly income supplement benefit for low‑income workers would rise by some 50 euros per month for 3 million households.
Cheap meals for students in university canteens will be extended, and steps will also be taken to boost affordable housing. To help finance these measures, a corporate surtax on large companies that was supposed to last only one year will be extended through 2026 and will raise 8 billion euros.
Boris Vallaud, who leads the Socialists in the National Assembly, responded to those concessions by telling newspaper Le Parisien: "The Prime Minister's announcements allow us to imagine that we will not need to vote no-confidence."
MAINSTREAM PARTIES WANTED TO AVOID SNAP ELECTION
In the hunt for a budget, Macron lost two governments and saw France plunged into turmoil rarely seen since the 1958 creation of the Fifth Republic, the current system of government.
While neither the Socialists nor the conservative Les Republicains are enamoured with the proposed budget, political analysts said neither wanted to risk snap parliamentary elections with the far right ahead in popularity polls.
Conservative chief Bruno Retailleau wrote on X that the amended budget would result in "more spending and higher taxes". However, he indicated that he would allow the government to fight another day in any ensuing no-confidence vote.
"This budget confirms that we will have to wait until the presidential election to implement the reforms the country needs," he added.
HARD LEFT PROMISES NO-CONFIDENCE VOTE
Lecornu's office had said late last week that it was impossible to adopt a budget by a vote in a parliament that is fragmented and fractious.
Mathilde Panot said her hard-left France Unbowed party would file a motion of no confidence "in opposition to this budget and in defence of the dignity of parliament."
Lecornu repeated the budget deficit would be no higher than 5% of GDP, and possibly lower.
"The good news is that the prospect of early legislative elections is receding, and the government should remain in place for the moment," ING analysts said in a note on Sunday.
"However, the final budget is far from business‑friendly, and the tax increases are likely to weigh on investment and hiring in 2026, with a negative impact on economic growth."
($1 = 0.8601 euros)
(Reporting by Alessandro Parodi, Dominique Vidalon, Elizabeth Pineau, Leigh Thomas and Michel Rose, editing by Richard Lough, Toby Chopra and Hugh Lawson)
A tax rebate is a refund of tax payments to taxpayers, often used as an incentive to encourage spending or investment.
Economic growth refers to an increase in the production of goods and services in an economy over a period, often measured by GDP.
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