French Parliament Advances Emergency Budget Law to Avert Fiscal Paralysis

The 'special law,' adopted unanimously by the National Assembly, ensures government operations continue into 2025 after the budget impasse and awaits Senate approval.

The National Assembly unanimously approved the 'special law' to allow the government to collect taxes and borrow funds, maintaining essential state functions into 2025.
The legislation follows the collapse of former Prime Minister Michel Barnier's government and the subsequent failure to pass a 2025 budget, leaving France in a rare political and fiscal deadlock.
Proposed amendments, including indexing income tax brackets to inflation, were ruled inadmissible by the Assembly president, citing constitutional limits on the law's scope.
The Senate is expected to finalize the law this week to ensure its enactment before the year-end deadline, avoiding disruptions to public services and state funding.
Key fiscal measures, such as tax credit extensions and inflation adjustments, are anticipated to be debated in early 2025 under the new government led by François Bayrou.