Summary: On 12 October, newly re-appointed French Prime Minister Sébastien Lecornu unveiled a new government amid growing pressure to finalize a budget that must be ready by 15 October to comply with constitutional deadlines. This marks PM Lecornu’s second attempt to form a government after a no-confidence vote was passed against his previous administration, leading to his resignation on 06 October. The new Cabinet includes members who have served in previous governments aligned with President Emmanuel Macron, as well as a few members from other political parties. Roland Lescure has been appointed Finance Minister.
Background: Since 2022, France has experienced political instability, with President Emmanuel Macron’s party losing its legislative majority. Snap elections in 2024 resulted in a hung parliament, leaving President Macron’s party to lead a minority government. Since then, all prime ministers appointed by President Macron have been forced to resign after facing no-confidence votes over their budget plans. This ongoing instability has made passing budgetary reforms and other key policies challenging, further straining the country’s economy, which is projected to record a deficit of 5.4 percent of GDP this year.
Implications:
- The new government is set to meet on 14 October to finalize a draft of the 2026 budget. Lecornu faces a difficult task of seeking compromises from opposition political parties to avoid another no-confidence vote and to reduce the country’s public spending deficit.
- If a draft of the 2026 budget is presented to parliament this week, it could potentially be implemented by year-end, following the mandatory 70 days of negotiations in both houses of parliament. However, PM Lecornu is likely to continue facing objections from opposition parties and could face another no-confidence vote.
- Marine Le Pen, leader of the Rassemblement National (RN) party, stated that her party would propose a parliamentary motion against PM Lecornu as soon as 13 October. The RN is likely to continue pushing for new elections. France Unbowed is also expected to vote against the government and continue calling for President Macron’s resignation. Both parties together control more than one-third of the seats in the lower house of parliament.
- The Socialist Party, whose support is essential for the Lecornu government, has demanded the removal of President Macron’s pension reforms which would raise the retirement age from 62 to 64 from the budget in exchange for its support of the new government.
- However, if the pension reforms are dropped, it could lead Les Républicains (LR) to withdraw their support. Following the announcement of the new government, the LR stated that it would expel the six members who agreed to join PM Lecornu’s cabinet.
Outlook: It remains unclear how long the new PM Lecornu government will survive, given the severe opposition and deep ideological divides between political parties. PM Lecornu has stated that he may resign again if his budget fails to meet the conditions set by members of parliament. Most parties, apart from the RN, are keen to avoid new elections, but a lack of compromise on key issues could still trigger an early vote.
If PM Lecornu’s government is dissolved again, President Macron’s administration may miss the budget deadline. Lawmakers may then need to pass emergency stopgap legislation to authorize spending, taxation, and borrowing from 01 January until a full budget is approved. While such a law would prevent a government shutdown, it would impose strict limits on public finances. An early legislative election could also leave the new parliament with little time in December to pass interim measures. Consequently, France is likely to face further political and economic instability, potentially leading to reduced foreign investment and nationwide protests.
Organizations are advised to maintain situational awareness, monitor developments related to the 2026 budget negotiations and potential strikes or protests, and prepare contingency plans for possible disruptions to operations or travel.
