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France's budget built on shaky ground, fiscal watchdog warns
Published by Global Banking & Finance Review®
Posted on October 14, 2025
2 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on October 14, 2025
2 min readLast updated: January 21, 2026
France's 2026 budget is criticized for relying on optimistic economic assumptions, with the fiscal watchdog warning of potential shortfalls in planned measures.
PARIS (Reuters) -The French government's 2026 budget plans are based on rosy economic assumptions and its belt-tightening measures may fall short or never even take shape, the independent fiscal watchdog said on Tuesday.
Reappointed on Friday, Prime Minister Sebastien Lecornu is racing to present a 2026 budget bill to parliament before constitutional limits on reviewing the legislation run out.
The budget, already submitted to the Haut Conseil des Finances Publiques for review, aims to reduce the deficit to between 4.7% and 5% of GDP — a modest improvement from this year's 5.4%, the fiscal watchdog said.
The government's plan hinges on a more than 30 billion euro ($34.7 billion) budget squeeze, including cuts to corporate tax breaks, tighter rules on social welfare contributions, and new levies such as a small parcel tax and an exceptional surtax on complementary health insurers, the Haut Conseil said.
It also clamps down on the taxation of holding companies used by wealthy people to lower their tax bills, stopping short of a 2% tax on wealth over 100 million euros as demanded buy the Socialists.
(Reporting by Leigh Thomas; Editing byh Benoit Van Overstraeten)
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