France's budget crisis: Prime Minister Sébastien Lecornu threatens blockade before presidential election

French Prime Minister Sébastien Lecornu is currently experiencing an unpleasant déjà vu: the budget nightmare is repeating itself. Last year, Lecornu was nominated to wrest a budget for 2026 from the completely divided parliament. He finally succeeded by freezing pension reform and making major concessions to the socialists.

But just a few months before the presidential election next April, he once again has to fear that the opposition parties will block a budget compromise for 2027.

“We could take measures this fall to rebuild the country financially. Difficult, but not brutal measures,” says Lecornu, almost imploringly. "But if we don't take these difficult measures now, the future government - whatever it looks like - will have to make brutal cuts."

Interest payments increased by a fifth

France now pays almost four percent interest to finance its loans. In the first half of 2026, the state owed its creditors a total of 34.5 billion euros in interest - almost a fifth more than in the same period last year.

"If we don't pass a budget, it will have such a negative impact on interest rates that all the nice proposals that the presidential candidates are now coming up with will be eaten up before the people even vote," warns Lecornu.

Left against social cuts

But the opponents of his center-right government - such as Olivier Faure from the Socialists or Jean-Luc Mélenchon from the left-wing extremist LFI - made it clear at their campaign launch events that they would not support a budget with social cuts and were prepared to overthrow the government over it.

In a political system that does not provide for real coalitions, it is logical for the opposition parties to distance themselves from the government over the budget issue in the beginning of the election campaign, explains political scientist Benjamin Morel: "Because if they were to help pass the budget, they would inevitably be counted as part of the government majority and expose themselves to the accusation of supporting the balance sheet of Macronism."

There could be fatal financial market consequences

While candidates from the ruling center-right alliance such as Édouard Philippe and Gabriel Attal propose reforming the pension system - working longer, more private provision - Marine Le Pen from the right-wing Rassemblement National (RN) is sticking to a maximum retirement age of 62 years.

But the shrewd tactician is keeping the question of whether the RN will reject Lecornu's draft budget open. Instead, she recently surprised with the proposal to introduce a debt brake.

While the presidential candidates are already outdoing each other with proposals and threats of boycotts, Lecornu warns that if France does not pass a budget this fall, the country will become untrustworthy. This could have fatal consequences on the financial markets - and massively restrict the new government's scope for political action.