French lawmakers approve taxation part of 2026 social security financing

PARIS, Dec 5 (Reuters) - Lawmakers in the lower house of the French parliament on Friday approved taxes to finance welfare, health and pension spending in the 2026 social security budget, a major part of France's overall state budget.

The vote, with 166 in favor and 140 against, comes after Prime Minister Sebastien Lecornu made late on Thursday concessions to keep the legislation on track.

Lecornu had warned on Thursday that France risked losing control of social security spending as lawmakers from centrist Horizons and Socialists balked at supporting the bill.

Now the vote has passed, they will hold a final vote on the whole bill - a major part of France's overall public budget - on Tuesday.

To win Horizon's support, Lecornu offered to increase a tax used to finance social security less than planned and dropped plans to increase deductibles on state health insurance as a concession to Socialist lawmakers.

Lecornu had warned that a rejection would leave France with no social security budget heading into the new year, causing spending to spiral out of control.

His government aims to bring France's overall public sector budget deficit next year to 5% of GDP - the biggest in the euro zone - but has little room to manoeuvre in parliament in the absence of a majority.

President Emmanuel Macron lost his majority in last year's snap parliamentary election, triggering broad political instability. A battle over last year's budget triggered a no-confidence vote that brought down the cabinet of Michel Barnier, one of Lecornu's predecessors.

(Reporting by Leigh Thomas and Dominique Vidalon; editing by Philippa Fletcher and Benoit Van Overstraeten)