France's Government Faces Mounting Pressure Over Fiscal Policy

France's recently formed government is under significant strain as it navigates contentious budget negotiations just days after narrowly surviving a confidence vote. The political climate has become increasingly tense, with the Socialist Party demanding substantial policy changes as a condition for continuing its support of the centre-right administration led by Prime Minister Sébastien Lecornu.

The Socialists have called for the introduction of a wealth tax alongside higher levies on major technology companies and large inheritances. These measures are seen as crucial for securing their backing during the difficult budgetary discussions taking place in the National Assembly. Without these policy adjustments, the Socialists have indicated they may withdraw their support, leaving the government's stability in jeopardy.

During the recent confidence vote, the Socialists withheld their opposition after Prime Minister Lecornu pledged to halt the progress of President Emmanuel Macron's controversial pension reform. However, party leader Olivier Fore has stressed that significant amendments must be incorporated into the government's budget plan in the immediate future, or continued Socialist support cannot be guaranteed.

France's fiscal situation remains a pressing concern. The government is grappling with a high level of national debt, and the European Union has already initiated a deficit procedure against France due to its budgetary shortfalls. Last year, the national deficit reached 5.8 percent of GDP. It is projected to be 5.4 percent this year, with the government aiming to reduce it below the five percent threshold by 2026.

To address these challenges, Prime Minister Lecornu has presented a budget proposal that includes approximately 30 billion euros in spending cuts. These measures are intended to reduce the deficit and bring France back in line with EU fiscal rules. Nevertheless, the parliamentary landscape remains deeply fragmented, making it uncertain whether lawmakers can reach a consensus on the proposed austerity measures.

Lecornu has publicly committed to not utilizing a special constitutional provision that would allow the budget to pass without a parliamentary vote. Instead, he has emphasized the importance of legislative debate and has urged all parties to collaborate in achieving a workable compromise. This approach is intended to foster greater transparency and legitimacy for the budget process, but it also raises the stakes for the government's survival if agreement cannot be reached.

As budget talks intensify, the government faces mounting demands from opposition parties to protect social spending and implement fairer taxation. The Socialists, in particular, are pushing for policies that would shift the fiscal burden towards the nation's wealthiest individuals and largest corporations. These proposals are likely to be central to the debates in the coming days as the government seeks to secure enough support to pass its budget plan.

The coming weeks are expected to be critical for France's political and economic trajectory. The outcome of the budget negotiations will not only determine the government's immediate future but also set the direction for fiscal policy amid persistent economic pressure and heightened social expectations.