French PM aims to cut budget deficit to 4.7% in 2026, rules out wealth tax

UPDATED: Sep 27, 2025 00:29 IST

Newly appointed French Prime Minister Sebastien Lecornu has made his stance clear on two major policy demands, announcing on Friday that he will not reintroduce a wealth tax or suspend the government’s widely debated pension reform. These statements provide the public and political stakeholders with some of the first indications of Lecornu’s approach as he faces the challenge of drafting the 2026 national budget and assembling a government amid a tense political environment.

EARLY SIGNALS ON POLICY DIRECTIONS

Since President Emmanuel Macron appointed him France’s fifth prime minister in less than two years, Lecornu has avoided detailing his policy agenda, prioritising consultations with party leaders and unions to build support. In an interview with Le Parisien, Lecornu stated, "I am starting from a blank script," suggesting openness to new approaches while marking a departure from immediate policy commitments. His predecessor, Bayrou, was removed following controversy over a proposed Euro 44 billion budget squeeze for the coming year.

FISCAL TARGETS AND PARLIAMENTARY NEGOTIATIONS

Lecornu has set a target for the 2026 budget deficit at around 4.7 per cent of GDP, closely aligned with Bayrou’s previous goal of 4.6 per cent, and a reduction from this year’s forecasted 5.4 per cent. He emphasised that the draft budget will reflect the French population’s demand for greater fiscal fairness. Lecornu underscored the importance of parliamentary debate, stating, "It is parliament which will shape the nation's budget," and, "In the end it will not be Lecornu's budget: compromises will have to be found in the chamber."

POLITICAL CHALLENGES AND OPPOSITION RESPONSE

Passing the 2026 budget is expected to be complex, as President Macron’s alliance lacks a clear majority and will likely require support from both conservatives and Socialists. The rejection of a wealth tax and pension reform suspension are both key Socialist Party demands. Socialist MP Arthur Delaporte, a party spokesman, criticized Lecornu’s direction, saying, "I don't see what changes in what Sebastien Lecornu is promising compared to what Francois Bayrou wanted to do," and, "I see nothing but emptiness and a slope towards the same thing, that is, the continuation of Macronism," warning that Lecornu risks being ousted by parliament if no significant changes are made.

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