#deficit-reduction

#deficit-reduction

According to the text that has now been adopted, the budget deficit is to be reduced to 5% of gross domestic product. There will be higher taxes on some businesses, including an extra tax on large companies' profits, which is expected to bring in around 7.3 billion ($8.6 billion) in 2026. The plan also boosts military spending by 6.5 billion, a move the premier last week described as the "heart" of the budget.

Budget negotiations have consumed the French political class for nearly two years, after President Emmanuel Macron's 2024 snap election delivered a hung parliament just as a massive hole in public finances made belt-tightening more urgent. The budget talks have cost two prime ministers their jobs, unsettled debt markets and alarmed France's European partners. However, Lecornu whose chaotic two-stage nomination in October drew derision around the world managed to secure the support of Socialist lawmakers through costly but targeted concessions.