France Prepares a Compromise 2027 Budget as Government Says There Is No Plan B

Overview

• Senior ministers warned on Monday, August 24 that there is “no plan B” if MPs block the 2027 budget, citing an IGF estimate that a special rollover law would cost at least €15 billion.
• The government plans a “budget of safeguard” focused on cuts and targeted measures, including below‑inflation revalorisation for higher pensions, higher medical franchises for patients, and the extension of a corporate surtax.
• Parliamentary arithmetic remains fragile: La France Insoumise has signalled a motion of censure, the executive lacks a stable majority, and ministers say they may seek ad hoc support from other groups to secure passage.
• Employer groups including Medef and Les Entrepreneurs are publicly opposing new charges on firms, while Raphaël Glucksmann’s proposal to raise about €15 billion from taxing ‘mega‑inheritances’ has been called optimistic by OFCE economists who say a broader base would be needed.
• Markets matter: French 10‑year borrowing costs have risen above 4%, raising interest charges and narrowing options for the budget, which the government aims to present in late September or early October with adoption still uncertain and real consequences for public services and households.