On December 15, 2025, the French Senate adopted the government's 2026 state budget bill (Projet de Loi de Finances, or PLF) in a heavily revised form, passing it by a vote of 187 to 109. This marks a critical juncture in the legislative process for France's 2026 fiscal framework, following the National Assembly's overwhelming rejection of the bill in its first reading earlier, where it garnered only one vote in favor.
The Senate, controlled by a right-center alliance dominated by Les Républicains (LR) and centrist groups, significantly reworked the original government proposal. Senators firmly opposed new tax increases, aligning with statements from Bruno Retailleau, leader of the LR group in the Senate. Retailleau emphasized that there could be "no agreement on a budget that would considerably increase taxes without significantly reducing the debt," reflecting the chamber's priority on fiscal restraint over revenue-raising measures.
Key changes included the outright rejection of a proposed surtax on large companies' profits, which the government had projected to generate approximately €4 billion in revenue. Senators also substantially reduced the scope of a planned tax on family holding companies (holdings patrimoniales), limiting its yield far below the government's initial expectations. These moves underscore the Senate's resistance to what many on the right view as excessive taxation burdens on businesses and wealth holders.
However, the revised bill struggled to deliver substantial spending cuts to offset the lost revenue. Parliamentary sources and government officials expressed concerns that the Senate's version would result in a public deficit exceeding 5% of GDP in 2026—estimated at 5.3%—well above the government's target of below 5% and its original projection of 4.7%. Economy Minister Roland Lescure described a 5.3% deficit as "unacceptable," urging Senate Republicans to make concessions in upcoming negotiations.
The adoption sets the stage for high-stakes talks in a joint committee (Commission Mixte Paritaire, or CMP), comprising seven deputies from the National Assembly and seven senators. The CMP is scheduled to convene on Friday, December 19, 2025, to attempt a compromise text. If successful, the agreed version would face final votes in both chambers, potentially by December 23, allowing for adoption before year-end. Failure would likely force the government to pursue emergency legislation extending 2025 spending levels into 2026, avoiding a shutdown but delaying a full budget resolution.
This process occurs against the backdrop of France's fragmented parliament, where Prime Minister Sébastien Lecornu's minority government navigates without a clear majority following President Emmanuel Macron's 2024 snap election losses. Budget battles have already contributed to political instability, toppling previous governments.
Separately, negotiations on the social security financing bill (PLFSS) have added complexity. The executive recently agreed to transfer €4.5 billion from the state budget to bolster social security accounts, a concession that must now be compensated elsewhere to avoid further deficit deterioration.
The Senate's vote highlights deep divisions on fiscal policy. While the government seeks a balanced approach combining modest tax hikes with spending controls to rein in France's high public debt—one of the eurozone's largest—the right-leaning Senate prioritizes tax relief and deeper cuts. Government officials, including Public Accounts Minister Amélie de Montchalin, have stressed the urgency of a compromise, warning that prolonged uncertainty harms economic stability.
As the CMP approaches, pressure mounts on all sides. Retailleau and LR senators have signaled inflexibility on tax increases, while the government insists on meeting deficit goals to satisfy EU fiscal rules and markets. Analysts note that the National Assembly holds the final say if no CMP agreement is reached, potentially allowing the lower house to impose its preferences—though its earlier rejection complicates this.
This budgetary saga reflects broader challenges for Lecornu's administration: balancing austerity demands with social spending commitments in a polarized legislature. Success in securing a 2026 budget before January 1 would provide crucial stability; failure risks extending France's pattern of provisional financing, raising concerns among investors about long-term fiscal health.
