The resignation of Sébastien Lecornu as a caretaker government amid disagreements over ministerial lineup has further complicated efforts to pass the budget by the December 31 deadline.

France's 2026 budget process is facing significant delays and uncertainty, with a critical deadline of December 31 for parliamentary approval, amid ongoing political instability.

The political turmoil is exemplified by France losing its fifth prime minister in less than two years, which has further delayed budget and debt-reduction reforms.

This instability, combined with economic turbulence, complicates efforts to finalize the budget for 2026, raising concerns about fiscal planning.

France's high government spending, particularly on social protection and generous pension schemes, contributes heavily to its rising debt, which is second only to Greece and Italy in the EU.

Last year, France spent 30.6% of GDP on social benefits, driven by costly pensions and family programs, adding to fiscal pressures.

Recent crises, including COVID-19 and energy costs from Russia’s invasion of Ukraine, have further increased government spending, intensifying fiscal challenges.

The High Council of Public Finances was scheduled to review the budget texts on October 13, after they were submitted earlier in October, but the process faces delays.

The government missed the October 13 deadline for presenting the budget proposals, raising concerns about meeting legal deadlines and the impact on fiscal stability.

France’s debt reached 116.5% of GDP in 2023, with investors growing concerned about its financial stability, which has led to higher borrowing costs.

Upcoming elections and the prospects of candidates like Marine Le Pen or Jean-Luc Mélenchon could significantly influence bond markets if their policies are implemented.

Despite having the highest tax revenues in the EU at 45.6% of GDP in 2023, France remains divided over whether to cut spending or raise taxes, leading to protests and legislative delays.