For the second consecutive year France will fail to approve the budget law by the end of the year and will have to rely on a “special law” to get by and avoid a financial stalemate.
This is the summary of what happened in the last few hours in Paris, where the Joint Parliamentary Committee, composed of seven deputies and seven senators, was unable to find a compromise on the budget law for 2026. Indeed, according to France News, The meeting would have lasted less than an hour. Then everyone went home and the budget was cancelled. A blow that falls on a country unable to emerge from a political and economic crisis that worries the whole of Europe. Moreover, at the same time that parliamentarians were trying in vain to reach an agreement on the 2026 budget, INSEE, the French Institute of Statistics, published data on the debt, which rose in the third quarter of 2025 to 117,4% of GDP.
France moves towards a special law
“For Christmas, the political menu will be the same as December 2024, rather bare: no budget, a miserable “special law” as a substitute” he writes disconsolately Le Monde.
After the failure recorded this morning by the joint commission charged with drafting a compromise budget for 2026, the government acknowledged the impossibility of adopting and promulgating a financial law before the end of the year and the Prime Minister Sébastien Lecornu – which intends to keep its promise not to invoke Article 49.3, which would allow for a green light bypassing Parliament – has announced that it will begin consultations with political party leaders on Monday. Meanwhile, Palazzo Matignon is preparing to file its application. a special law To ensure the functioning of the state machinery and avoid stalemate. However, this is a temporary solution: it would be impossible to reach the end of 2027 without a budget law, Palazzo Matignon warned.
“The government takes note of the failure in the joint committee”, writes Prime Minister Lecornu on X, thanking all those parliamentarians who “worked and researched, in good faith, a reasonable compromise” on the 2026 budget. He deplores, however, "the lack of will among some parliamentarians to reach an agreement, as was, unfortunately, feared for several days." "In accordance with the terms set out in the Constitution and the organic laws," the Prime Minister continued, "Parliament will therefore not be able to approve a budget for France before the end of the year. I regret this, and our fellow citizens do not deserve to suffer the consequences. In this context," Lecornu concluded, "I will convene, starting Monday, the main political leaders to consult them on the path to protect the French people and find the conditions for a solution."
What is the special law and what does it entail?
The special law is similar to ours provisional exercise. It will allow the government to extend the 2025 budget until early 2026, allowing at least the tax collection. The process leading to the green light for the measure is expected to be swift. The Council of State, consulted on the draft, will have to issue a legal opinion very quickly. "The text could be examined by the Council of Ministers over the weekend, then by the National Assembly on Monday, and by the Senate on Tuesday, before being promulgated immediately thereafter," the report continues. The world.
According to the French Economic Observatory, the special law, if applied for the whole year 2026, will lead to a loss of 6,5 billion euros in revenue governments, while simultaneously reducing spending by €3 billion. Furthermore, the deficit will be "significantly higher than desired," François Villeroy de Galhau, Governor of the Bank of France, told France Inter radio.
Public debt is ever higher
Meanwhile, concerns about the deficit and debt are growing. According to INSEE, the public debt French GDP stood at 3.482,2 billion euros at the end of the third quarter, up 65,9 billion compared to the previous quarter and equal to 117,4% of GDP. This is the third highest in the European Union, after Greece and Italy.
At this juncture, good news comes from the Bank of France, which has raised its growth forecasts for the French GDP bringing them to +0,9% for 2025 and +1% for 2026. The previous forecast was +0,7% this year and +0,9% for next year. Yesterday, INSEE had also raised its forecast for 2025 to +0,9%. As for prices, the Bank of France estimates inflation at 0,9% this year after 2,3% in 2024.
