The French National Assembly has rejected the 2027 state budget in first reading, with a unanimous vote of 458 against and two abstentions. The rejection of the budget's revenue section automatically led to the rejection of the entire text. The Assembly had previously made significant changes to the government's proposal, including the removal of several key articles.
The rejection of the budget is a setback for the government, which had aimed to reduce the public deficit to 5% of GDP by 2027. The budget's initial version proposed a deficit of 5% of GDP in 2027, down from 5.4% expected this year, through approximately 43 billion euros in savings. However, several deputies and the Minister of Public Accounts have expressed concerns that this trajectory may no longer be feasible due to lower-than-expected growth.
The debates in the Assembly were marked by disagreements between the government and opposition parties. The Minister of Public Accounts, David Amiel, criticized the deputies' votes, which he claimed would worsen the deficit to 5.9% of GDP. He also accused the Rassemblement national (RN) of attempting to block the government's proposals. In response, RN deputy Jean-Philippe Tanguy attacked the government's handling of the budget, accusing it of being unable to manage public finances.
Other opposition parties also criticized the government's budget proposal. Éric Coquerel, president of the La France insoumise (LFI) finance commission, argued that the budget failed to address the needs of the population and would exacerbate the deficit. The LFI and other parties had proposed several amendments, including the removal of measures to reduce taxes for retirees and local authorities.
The rejection of the budget means that it will now be considered by the Senate in its original form. The government has expressed hope that a compromise can be reached in December, based on the initial proposal and the text voted on by the Senate. However, with the current political climate, it is unclear whether an agreement can be reached. The government may consider using Article 49.3 to pass the budget without a vote or resorting to a budgetary ordinance.
The debates in the Assembly also highlighted divisions within the ruling coalition. Laurent Marcangeli, leader of the Horizons group, lamented the fact that the text had been "completely distorted" and called for a more responsible approach in light of the deteriorating economic outlook. The government faces significant challenges in finding a way to pass the budget, with some parties refusing to support it without significant concessions.
The budget's fate will now depend on negotiations between the government and opposition parties. If an agreement is not reached, the government may be forced to use exceptional measures to pass the budget. The rejection of the budget has also raised concerns about the impact on public finances and the government's ability to implement its economic policies.
Key points
- The French National Assembly unanimously rejected the 2027 state budget in first reading.
- The rejection of the budget may lead to a deterioration in the public deficit, which could reach 5.9% of GDP.
- The government faces significant challenges in finding a way to pass the budget, with some parties refusing to support it without significant concessions.
