UPDATE 3-French PM will force budget through parliament without vote, source says

Prime Minister Sebastien Lecornu, who was convening his cabinet, plans to invoke article 49.3 of the Constitution to circumvent a parliamentary vote on the finance bill, the source said, opting against a higher-risk executive order. It appeared to bring closer to a conclusion the centrist government's months-long slog to deliver a deficit-taming budget that moderate opponents could sufficiently stomach to ​refrain from voting the government out.

France will use special constitutional powers to force a budget for 2026 through parliament, a government source said on Monday, and appeared to have won enough political backing for the text to survive the inevitable ⁠no-confidence vote that would follow. Prime Minister Sebastien Lecornu, who was convening his cabinet, plans to invoke article 49.3 of the Constitution to circumvent a parliamentary vote on the finance bill, the source said, opting against a higher-risk executive order.

It appeared to bring closer to a conclusion the centrist government's months-long slog to deliver a deficit-taming budget that moderate opponents could sufficiently stomach to ​refrain from voting the government out. Needing to win support from the Socialists without alienating conservatives, Prime Minister Sebastien Lecornu on Friday said he would no longer cut a tax ‍rebate on pensions, and that a monthly income supplement benefit for low-income workers would rise by some 50 euros per month for 3 million households. Cheap meals for students in university canteens will be extended, and steps will also be taken to boost affordable housing. To help finance these measures, a corporate surtax on large companies that was supposed to last only one year will be extended through 2026 and will raise 8 ⁠billion euros.

Boris ‌Vallaud, who leads the Socialists in the ⁠National Assembly, responded to those concessions by telling newspaper Le Parisien: "The Prime Minister's announcements allow us to imagine that we will not need to vote no-confidence." MAINSTREAM PARTIES WANTED TO AVOID SNAP ELECTION

In the hunt for a ‍budget, Macron lost two governments and saw France plunged into turmoil rarely seen since the 1958 creation of the Fifth Republic, the current system of government. While neither the Socialists nor the conservative Les Republicains are ​enamored with the proposed budget, political analysts said neither wanted to risk snap parliamentary elections with the far right ahead in popularity polls.

Conservative chief Bruno Retailleau ⁠wrote on X that the amended budget would result in "more spending and higher taxes". However, he indicated that he would allow the government to fight another day in any ensuing no-confidence vote. "This budget confirms that we will have ⁠to wait until the presidential election to implement the reforms the country needs," he added.

HARD LEFT PROMISES NO-CONFIDENCE VOTE Lecornu's office had said late last week that it was impossible to adopt a budget by a vote in a parliament that is fragmented and fractious. Mathilde Panot said her hard-left France Unbowed party would file a motion of no confidence "in opposition ⁠to this budget and in defence of the dignity of parliament."

Lecornu repeated on Friday the budget deficit would be no higher than 5% of GDP, and possibly lower. "The ⁠good news is that the prospect of ‌early legislative elections is receding, and the government should remain in place for the moment," ING analysts said in a note on Sunday.

"However, the final budget is far from business-friendly, and the tax increases are likely to weigh on investment and hiring in 2026, with ⁠a negative impact on economic growth." ($1 = 0.8601 euros)

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