French Senate adopts 2026 state budget bill, paving way for final negotiations

ISTANBUL

France’s Senate on Monday adopted the government’s 2026 state budget bill, marking a key step in the legislative process ahead of final negotiations with the National Assembly later this week.

The upper house approved the finance bill after it had been overwhelmingly rejected at first reading by the National Assembly, where it received only a single vote in favor.

A joint committee made up of seven lawmakers and seven senators is set to meet on Friday in an attempt to reach a compromise, Le Parisien reported.

The Senate took a firm line against new taxes, with Bruno Retailleau, leader of the Republicans group, saying there could be “no agreement on a budget that would considerably increase taxes without significantly reducing the debt.”

In line with this stance, senators rejected a proposed surtax on large companies that the government had hoped would generate around €4 billion ($4.7 billion) in revenue.

They also significantly scaled back a planned tax on family holding companies.

However, the Senate struggled to identify major spending cuts, raising doubts that the revised budget can meet the government’s fiscal targets.

According to parliamentary sources, the final deficit could exceed 5% of gross domestic product, well above the government’s objective.

As part of negotiations on the social security financing bill, the executive agreed to transfer €4.5 billion from the state budget to social security, a move that will need to be offset elsewhere in the public finances.

If lawmakers and senators fail to reach an agreement in the joint committee, the National Assembly will retain the final say on the 2026 budget.