France Ready to Bypass Parliament to Push Through €43 Billion in Cuts

France’s government is prepared to push through €43 billion in spending cuts without a National Assembly vote if negotiations fail, Finance Minister Roland Lescure said.

Lescure said all elements of next year’s budget were open to discussion, subject to two conditions: the deficit must stay within 5% of gross domestic product, and amendments must not undermine economic growth.

“We’re going to use whatever it takes,” he said.

Constitutional Powers in Reserve

Prime Minister Sébastien Lecornu’s government could invoke Article 49.3 of the constitution if it cannot secure a parliamentary majority.

The provision allows legislation to pass without a vote in the National Assembly.

Lawmakers can respond with a no-confidence motion.

If that succeeds, the government falls, and the budget is defeated, as happened to France’s previous two prime ministers when they sought spending cuts.

Lescure identified another route if the government believes it cannot survive such a challenge: executive orders.

That option becomes available 70 days after the budget bill is submitted if it has still not reached a final vote.

“There’s always a fallback plan,” he said.

Borrowing Costs Add Pressure

The government is negotiating with a divided National Assembly ahead of next spring’s presidential election.

Investors worry that political deadlock will prevent spending restraint, contributing to a recent rise in borrowing costs.

The €43 billion package, equivalent to roughly $48 billion, has drawn criticism from leading presidential contenders Marine Le Pen and Jean-Luc Mélenchon.

Pensions are a central dispute. Lescure wants to reduce the rate at which many payments rise with inflation, citing the €15 billion cost of a 5.4% increase in 2024.

Both Le Pen and Mélenchon favor expanding pension spending, which currently accounts for 14% of GDP, through proposals that would lower the retirement age to as little as 60.

After discussions with representatives of both candidates, Lescure included a provision allowing the election winner to reverse parts of the budget, including the pension measure.

Education Protests Intensify

The negotiations coincide with nationwide demonstrations over school conditions and education funding.

More than 260,000 students, parents and teachers joined protests on Tuesday, while demonstrators blockaded hundreds of high schools.

Protesters are demanding repairs to deteriorating buildings, smaller classes and additional teachers.

They also oppose the budget cuts.

The proposal would increase education funding by €1.2 billion while eliminating more than 1,500 teaching jobs as student numbers decline.

Some demonstrations turned violent, with protesters setting trash cans ablaze, damaging bus stops and throwing projectiles.

Police used batons and tear gas. French authorities said more than 200 students were wounded.

Election Rivals Weigh Their Options

Le Pen called the budget unfair and ineffective but stopped short of setting firm negotiating red lines, citing pressure on public finances and from bond markets.

She proposed €140 billion in spending reductions and a deficit of 2.2% of GDP by 2032.

How she would achieve those targets remains unclear, particularly alongside proposed tax exemptions for French citizens under 30 and lower taxes on fuel and essential goods.

Lescure argued that presidential candidates have an interest in settling the budget quickly.

A prolonged dispute could carry into next year, deepen uncertainty and damage growth.

“They’re going to be either inheriting a budget that’s sound, that’s hard, that can be changed in the details they don’t want, or no budget,” he said.