Fiscal Policy
French doubt success of Lecornu's 2026 budget
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A poll reveals that 52% of French people anticipate the failure of the 2026 finance bill and want a censure motion against the Lecornu government. The finance commission rejected the first part of the budget, and debates in the National Assembly begin this Friday without using article 49.3. Oppositions, like the RN and socialists, threaten to block the bill with their counter-proposals.
Socialists threaten to censure government over 2026 budget
On the eve of the budget debate in the National Assembly, the Socialist Party (PS) issued an ultimatum to the government: advances on fiscal justice by Monday, or face a motion of censure. Olivier Faure, the PS first secretary, criticized the lack of measures against the ultra-rich and Gafam. The government's fate now hinges on concessions from the majority.
Sweden Announces Expansive Budget with Tax Cuts and Military Boost
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In a bold move ahead of next year's elections, the Swedish government unveiled an 87 billion kronor ($8.5 billion) spending package aimed at stimulating economic growth through tax reductions, increased defense allocations, and support for households and businesses. The budget, presented by Finance Minister Elisabeth Svantesson, reflects a strategic pivot to address slowing growth and geopolitical tensions, drawing on fiscal surpluses to fund the initiatives without new borrowing. This election-year bonanza is expected to influence voter sentiment amid rising concerns over inflation and security.
Russia Proposes VAT Hike to Fund Ukraine War
Russia's finance ministry has proposed increasing the value-added tax from 20% to 25% starting next year, aiming to generate additional revenue to sustain military operations in Ukraine. The move comes amid escalating costs of the ongoing conflict, now in its fourth year, and reflects the Kremlin's efforts to bolster state finances without directly taxing citizens more heavily. If approved, this tax adjustment could raise billions in revenue but may exacerbate inflation and economic strain on Russian households.
Italy Forecasts Sluggish Economic Growth for 2025 and 2026
Italy's government has projected trend economic growth of just 0.5% for 2025, rising modestly to 0.7% in 2026, amid ongoing challenges from high debt levels and external pressures. The forecasts, released by the Treasury, underscore persistent structural issues in Europe's third-largest economy. Officials emphasize the need for fiscal prudence to maintain stability.