The French government, facing a parliamentary deadlock on the 2026 budget, must decide on Monday between article 49.3 and an unprecedented budgetary ordinance. It is renewing the surtax on large companies' profits at 8 billion euros, while renouncing a cut to the CVAE. This aims to secure an agreement with socialists to avoid censure.
The debate over France's 2026 budget has reached a critical point after three months of parliamentary discussions, interrupted Thursday evening at the National Assembly due to lack of agreement. Prime Minister Sébastien Lecornu must choose on Monday, during the Council of Ministers, between article 49.3 of the Constitution, which allows adopting a text without a vote by staking the government's responsibility, and an unprecedented budgetary ordinance (article 47), which would impose the initial project even if the government falls.
Government spokesperson Maud Bregeon announced on Franceinfo Sunday that the surtax on large companies' profits, a key point, will yield about 8 billion euros, at the same scale as in 2025, but exempting intermediate-sized enterprises (ETI). This meets a demand from the Parti Socialiste (PS), which considers not censuring if financing does not burden the French, according to Olivier Faure. Lecornu justified this effort in a letter to business leaders: “This effort asked of very large companies has a very clear meaning and national scope: it will directly contribute to financing the acceleration of our defense trajectory,” praising their “patriotism”.
Additionally, the government is renouncing a cut to the business value-added contribution (CVAE), a production tax criticized by employers, initially planned at a cost of 1.3 billion euros and full abolition by 2028. Lecornu hopes to continue this reduction in the future.
Assembly President Yaël Braun-Pivet regrets that debates could not conclude and calls for reforming the procedure, criticizing an excessive focus on taxes at the expense of topics like justice or education. On the left, Manuel Bompard (LFI) promises a motion of censure, while on the right, Xavier Bertrand (LR) urges adopting the budget. François Hollande prefers 49.3 to avoid ordinance risks.
This choice, influenced by weekend discussions especially with the Senate, exposes the government to potential censure but ensures a budget amid a deficit capped at 5% of GDP.
