PARIS — French lawmakers will find out Tuesday whether weeks of tense budget talks end with a deal or a disaster for the eurozone’s second-biggest economy.
The vote concerns next year’s social security budget, but the result has immediate ramifications for France’s financial outlook and Prime Minister Sébastien Lecornu’s survival.
Should the bill pass, Lecornu will have threaded the needle on an issue that doomed his two immediate predecessors.
Failure could cost him his job and further frighten markets already scared that French political paralysis could drag all of Europe into a debt-fueled catastrophe.
The drama is going down to the wire. A Lecornu adviser told POLITICO the vote is expected to come down to about 10 votes in the 577-seat body.
Here’s what you need to know.
How is it looking for Tuesday?
Tuesday’s vote in the National Assembly, France’s more powerful lower house of parliament, is likely the final opportunity for MPs to pass the 2026 social security budget before ringing in the new year.
So far, it’s not looking great.
The challenge for Lecornu’s minority government is to get the support of the moderate left while keeping his natural allies and governing partners, the conservatives and the centrists, on board.
The PM back in October handed the Socialists a major concession to ensure his government’s survival when he announced the government would suspend until 2027 a law raising the retirement age from 62 to 64 for most workers, a flagship policy of President Emmanuel Macron.
To seal the deal with left-wing lawmakers, the government last week proposed increasing healthcare spending, especially for hospitals. Socialist lawmakers are now set to vote in favor of the bill, party leader Olivier Faure said on Monday, while the Greens are expected to abstain.
But Lecornu appears to have lost support from the conservative Les Républicains and Horizons, a smaller center-right party led by Macron’s first prime minister and presidential candidate Edouard Philippe. Lawmakers from both parties are hesitating between abstaining or voting against the bill over concerns it doesn’t adequately reduce the French budget deficit, which is projected to come in at 5.4 percent of gross domestic product.
Lecornu previously said he wants next year’s fiscal plans to bring that figure down to no more than 5 percent of GDP.
Why is this vote so important?
Big picture, France needs to convince observers that it has not become too ungovernable to balance its books or free up money to spend on other costly policy areas like defense and reindustrialization.
The Lecornu adviser previously quoted said this is effectively the last chance for the National Assembly to pass the social security budget this year. If the bill isn’t greenlit in 2025, it’s likely “dead” as is, according to a parliamentary official granted anonymity in line with standard professional practice in France.
Failure to pass a social security budget for a second year running is likely to spook markets and could present the political extremes with another opportunity to call for Lecornu’s head.
It also bodes poorly for the government’s ability to reach a compromise on the state budget, a separate piece of legislation lawmakers are working on — and an even bigger boondoggle considering the last time the National Assembly voted on it only one MP backed it.
The French Senate is expected to vote on its own version of the state budget on Dec. 15, following which the two chambers will try to reconcile their conflicting versions. Should the Senate and National Assembly fail to strike a deal, the state budget will end up back in the National Assembly.
Then the National Assembly and Senate will likely only have one more shot at getting the job done before 2026.
Parliamentary budget work must be wrapped by Dec. 23 to give France’s Constitutional Court enough time to review the bill so Macron can enact it before a Dec. 31 deadline.
What happens if they fail to reach an agreement?
Fear not, French pensioners. The state will not stop paying for your retirement.
Lawmakers have legislative bandages that can keep France’s social safety net solvent and the government funded in the short term, notably by rolling over the 2025 state budget into 2026.
But these are short-term fixes that would not address the root causes of France’s fiscal problems.
So does that mean another French government is about to fall?
Not necessarily.
Lecornu has ruled out using Article 49.3, a constitutional maneuver employed by his predecessors in an attempt to ram through legislation, and instead gave parliament a free hand in negotiating the budget.
By ruling out Article 49.3, Lecornu is less likely to face parliamentary censure (lawmakers can respond to the maneuver by putting forward a no-confidence motion).
But as Macron’s fifth prime minister in fewer than two years, the pressure is on him. If Lecornu fails to get a budget passed or is toppled in the coming weeks, a snap election may be the only way out of the gridlock.
Marine Le Pen’s far-right National Rally is leading most opinion polls and would be primed for success in such a contest, though France’s two-round runoff system makes it difficult to predict how polls would translate into parliamentary seats.
Anthony Lattier contributed to this report.
4 questions as France faces critical budget crunch
Source: Viral Showbiz Pinay
0 Comments