French National Assembly rejects 2027 draft budget

On Wednesday, the French National Assembly rejected the revenue component of the 2027 state budget by a vote of 458 to zero, with two abstentions. The rejection followed ten days of debate, during which both the opposition and government-supporting deputies voted against the text due to conflicting concerns regarding fiscal policy and amendments that significantly altered the government's original proposal. Key rejected provisions included the abolition of tax breaks for pensioners and organizations, as well as proposed increases in corporate taxation.

This legislative failure occurs as France faces severe economic challenges, including a 0.1% contraction in GDP during the third quarter and a budget deficit currently at 5.4%. The government, led by Prime Minister Sebastien Lecornu, had aimed to reduce the deficit to 5% of GDP in 2027 by implementing 54 billion euros in spending cuts. Amidst ongoing national strikes and widespread protests against the cost of living, the government is now reportedly considering invoking special constitutional powers to force the budget through via decree. The Senate is scheduled to begin reviewing the draft on November 20.