Headlines
France's Socialists threaten to oust government amid fraught budget talks
Published by Global Banking & Finance Review®
Posted on October 24, 2025
3 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on October 24, 2025
3 min readLast updated: January 21, 2026
France's Socialists threaten to oust the government over budget disagreements, demanding higher taxes on billionaires. Economic instability looms.
By Alessandro Parodi and Elizabeth Pineau
PARIS (Reuters) -France's Socialists have threatened to topple the government by Monday if their budget conditions are not met, saying on Friday they would file a no-confidence bill early next week if billionaires are not forced to pay more tax.
"We have made an effort not to censure the prime minister, but so far we have not seen any sign of a willingness to compromise," Socialist party leader Olivier Faure told BFM on Friday. "If there is no change by Monday, it's all over."
Given the arithmetic of France's starkly divided parliament, the Socialists have the power to topple Prime Minister Sebastien Lecornu's weak minority government if they partner with the far left and the far right, which have said they want to oust him.
Lecornu had managed to win Socialist support by pledging to scrap a landmark pension reform, but the left clearly believes it can extract greater concessions as talks to pass the tax and revenue component of the 2026 budget began on Friday on the floor of the National Assembly.
Faure, whose party has long argued for a billionaires' tax that the government has been reluctant to include, said the current bill targeted unfairly retirees, young people, and families.
"It's unbearable. We cannot ask these segments of the population - working-class and middle-class people - to continue making sacrifices while the wealthiest are not contributing," he said, adding the budget should aim to find between 15 billion and 20 billion euros ($17 billion and $23 billion) in additional revenue.
The threat of more instability is worrying for France's economy, with French business activity declining faster than expected in October, according to data released on Friday.
Moody's could well downgrade French debt in a ratings decision later on Friday, just a week after S&P Global handed France, the euro zone's second-biggest economy, a surprise downgrade.
Lecornu is under mounting pressure to trim down France's deficit, the euro zone's largest, but faces major pushback from opponents over how to achieve savings. He aims to put a more than 30 billion euro squeeze on the budget next year to get the fiscal deficit down to 4.7% of economic output.
A formal vote on the income part of the budget is scheduled for November 4, before the bill moves on to the conservatives-held Senate.
(Reporting by Alessandro Parodi and Dominique Vidalon and Elizabeth Pineau; Editing by Gabriel Stargardter and Alison Williams)
A budget is a financial plan that outlines expected revenues and expenditures over a specific period. It helps individuals and organizations manage their finances effectively.
Corporate tax is a tax imposed on the income or profit of corporations. It is usually calculated as a percentage of the company's earnings.
Economic growth refers to an increase in the production of goods and services in an economy over a specific period, typically measured by the rise in Gross Domestic Product (GDP).
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