The French government, led by Prime Minister Sébastien Lecornu, is preparing to present its 2027 budget bill in the coming weeks, with early details showing pensioners will be asked to help cover six billion euros in savings while the defence budget rises by 6.4 billion euros.
It will be the last budget of President Emmanuel Macron's second five-year term. With public finances deep in deficit and no parliamentary majority behind him, Lecornu will have to strike compromises with other parties in the middle of the presidential campaign, or risk a no-confidence vote. He has repeatedly said the path ahead is narrow. The government is expected to unveil its full project by early October.
Pensioners face a new contribution
Pensioners, whose incomes have held up better than those of employees since inflation returned in 2022, will not be spared this time. The government is weighing two options: ending the automatic inflation-linked increase for the highest pensions, or partially or fully scrapping the 10% tax allowance pensioners receive for professional expenses. Together, the measures are meant to save six billion euros. The executive has promised there will be no half-measures, though government spokesperson Maud Bregeon said pensioners would not bear the central burden of the budget.
No freeze on income tax brackets
One point is already settled: there will be no so-called blank year. According to Bregeon, freezing the income tax brackets, which would automatically raise taxes for households whose income grew in 2026, is not being considered. The brackets are instead expected to rise roughly in line with inflation. Last year, the government proposed freezing the brackets, only for the measure to be rejected by MPs at first reading, including lawmakers from parties that support the government.
Some ministries spared from cuts
The bulk of the effort is expected to come from spending cuts rather than higher revenue, but several ministries look set to avoid the sharpest reductions. The armed forces budget is expected to rise by 6.4 billion euros, reflecting continued international tensions. The justice ministry would gain 400 million euros, the interior ministry 600 million, education 800 million, research 500 million and ecology 1.1 billion, with social housing and apprenticeship programmes also expected to be spared. By contrast, budgets for labour, foreign development aid, agriculture and health are set to fall, according to a document seen by the news agency AFP and dated July.
Corporate surtax to be reduced
In a letter to business owners published in early September, Lecornu promised not to touch the Pacte Dutreil, a scheme that reduces taxation when a family business is passed on to heirs. He also said the government would partially roll back the so-called exceptional contribution on large companies' profits. That surtax will be extended for a third consecutive year, but at a lower rate, Lecornu said.
Easier family gifts
The government also plans temporary measures to encourage family donations, saying it wants to help money circulate when it is most needed. The main change would raise the threshold for tax-exempt family cash gifts from 31,865 euros to 50,000 euros.
New funding to fight violence
The executive is also considering setting aside close to 1.5 billion euros to combat gender-based and sexual violence, and 2.6 billion euros for child protection, Lecornu announced in an opinion piece for the newspaper Le Monde. He said adequate funding was a condition for the credibility of the state.
Deficit target and wealth taxes still unclear
Much of the budget's shape remains undecided, starting with the public deficit target. Public Accounts Minister David Amiel has said only that it must not be worse than the 2025 figure of 5.1%. That would still mean stagnation, since the 2026 deficit is already expected to exceed 5%, according to Economy Minister Roland Lescure, who forecasts around 30 million euros in savings next year.
It is also unclear how much will be asked of the wealthiest households. The government has rejected the left's proposal for a Zucman tax, a wealth tax proposal named after the economist Gabriel Zucman, but the finance ministry is looking at ways to draw revenue from the richest without creating a new tax. Amiel has proposed to the prime minister reforms to certain tax loopholes that benefit only the wealthiest, without giving further details.
Sophie Binet, general secretary of the CGT trade union, has called for a demonstration on September 29, saying the budget should not be written to the dictation of employers' groups.
What happens next
From October, lawmakers in the National Assembly and then the Senate will work on the text to reach a final version, which may or may not be substantially rewritten, before attempting to pass it. But weeks of debate could ultimately count for little. After the presidential election, and possibly legislative elections that follow it, a new president could overhaul the budget entirely and force through a supplementary finance bill to readjust state spending and revenue to match their own programme, without waiting for the 2028 budget.
