French PM races to pass stopgap budget law to avoid shutdown

PARIS, Dec 22 (Reuters) - Prime Minister Sebastien Lecornu held talks on Monday with French political leaders on emergency legislation to keep the government running in the new year in the absence of a proper budget.

A joint committee of lawmakers from both chambers failed on Friday to hammer out a full 2026 budget bill, forcing Lecornu to seek stopgap legislation to allow spending, tax collection and borrowing to continue in January.

Lecornu's office said that he would meet with officials from parties other than the far right and hard left ahead of a cabinet meeting where the rollover law is due to be approved before being sent to parliament.

The law, which legislators are likely to approve on Tuesday, would buy more time to debate a proper 2026 budget in January.

Investors and ratings agencies are scrutinising France's finances, with the country running the euro zone's highest budget deficit.

LECORNU WANTS TO AVOID CONFIDENCE VOTE

Conservative lawmaker Philippe Juvin, who has been steering the 2026 budget through the lower house, said he expected a full text to be passed in early January.

Juvin told BFM TV he hoped Lecornu would use special constitutional powers to force through a compromise text that could be amenable to Socialist lawmakers.

Lecornu had pledged not to use such powers and to do so would likely trigger a vote of no confidence from the far right or hard left, though such a motion would fail without Socialist support.

Lecornu's minority government has little room for manoeuvre in France's fractious parliament, where budget battles have already toppled three governments since President Emmanuel Macron lost his majority in a 2024 snap election.

France used emergency rollover legislation last year until a proper 2025 budget could be passed in February, which the government says cost 12 billion euros ($14 billion).

($1 = 0.8524 euros)

(Reporting by Leigh Thomas; Editing by Toby Chopra)