Prime Minister Sébastien Lecornu's government unveiled the 2026 budget project on October 14, including the suspension of the pension reform via an amendment to the PLFSS in November. This concession to the Socialist Party aims to stabilize the country but draws criticism from the right and opposition. The plan targets a 30 billion euro deficit reduction through tax freezes and cuts to fiscal niches.
Prime Minister Sébastien Lecornu delivered his general policy speech to the National Assembly on October 14, announcing the suspension of the 2023 pension reform. "Suspending is not renouncing," he stated, specifying that the government will submit an amendment to the Social Security Financing Bill (PLFSS) in November for this measure. The estimated cost ranges from 400 million to 16.5 billion euros according to analyses.
The 2026 budget aims to cut the public deficit by 30 billion euros, bringing the deficit of mandatory regimes to 17.4 billion in 2026 from 23 billion in 2025. Key measures include a freeze on social benefits in 2026, saving 3.8 billion euros, mainly affecting retirees through pension de-indexation; a freeze on the income tax scale, making 200,000 households taxable; and the elimination of 23 inefficient fiscal niches, yielding 5 billion euros, including the 10% abatement on pensions.
A new 2% tax on non-professional assets of family holdings valued over 5 million euros targets the wealthiest, seen as a disguised return of the wealth tax (ISF). The government also proposes entrusting pension management to social partners by spring.
Reactions abound: Bruno Retailleau (LR) condemns an unacceptable budget, with 14 billion in additional levies out of 31 billion in efforts. Jordan Bardella (RN) questions if socialists can "look their voters in the eyes," deeming censure possible. Olivier Faure (PS) hails a "first victory" and plans to reintroduce the Zucman tax via amendment. The European Commission urges measures to meet budget commitments. In the Senate, Lecornu received a cold welcome, with calls for more clarity.
Despite tensions, the government hopes to avert censure on Thursday, pledging no use of Article 49.3 and increased funding for the military and mental health (300 million euros).
