Political Crisis Deepens as France Faces Budget Deadline
French Prime Minister Sébastien Lecornu has expressed cautious optimism about reaching a budget agreement by year-end, despite the country's worst political crisis in decades. The 39-year-old premier, who became France's fifth prime minister in less than two years, told reporters during a press conference that there is 'a great willingness within the French government to have a budget by the end of the year'.
Resignation Rejected Amid Political Turmoil
Just two days earlier, Lecornu had announced his intention to resign after less than a month in office, but President Emmanuel Macron refused to accept his resignation. 'The president asked me to make one last attempt to resolve the political crisis,' Lecornu explained, highlighting the extraordinary circumstances facing the French government.
The political instability stems from the 2024 legislative elections that resulted in a hung parliament, with three opposing blocs unable to form a majority government. According to CNBC analysis, France's budget deficit reached 5.8% of GDP in 2024, far exceeding EU rules requiring deficits under 3%, while public debt stands at 113% of GDP.
Economic Stakes Could Force Compromise
Lecornu warned that France's international reputation is at stake if the budget isn't approved. 'The image of France is on the line if the budget doesn't come through,' he stated during his press conference. The premier has been conducting intensive negotiations with various political parties, including the left-wing New Popular Front, Macron's centrist Ensemble alliance, and the far-right National Rally.
French political correspondent Frank Renout observed: 'Sébastien Lecornu is engaged in political tightrope walking. On one side there is a hopelessly divided parliament that has opposed three governments in the past year and sent them home. And on the other side, there must be a budget and significant savings must be made, according to President Macron.'
Mass Protests Against Austerity Measures
The budget crisis occurs against a backdrop of widespread social unrest. Recent weeks have seen massive protests across France, with France 24 reporting that at least 195,000 people demonstrated nationwide on October 2, 2025, while unions claimed participation reached 600,000. These represent the third major protest wave in recent weeks, with cumulative participation exceeding 2 million people.
Protesters have expressed outrage over proposed austerity measures, changes to unemployment benefits, healthcare cost increases, and the controversial pension reform that raised the retirement age to 64. The Eiffel Tower was closed during recent protests, and 27% of school staff joined strikes, significantly disrupting public services.
EU Pressure and Economic Consequences
France is currently under the EU's 'excessive deficit procedure' and has until 2029 to comply with fiscal rules. However, Al Jazeera reports that discussions have revealed agreement to keep France's deficit below 5% of GDP next year to maintain credibility with international markets.
Goldman Sachs has raised its 2025 deficit forecast to 5.5% and lowered growth expectations, warning that deep political disagreements and slower growth will prevent significant progress on fiscal discipline. The investment bank's analysis suggests that France's political fragmentation between far-left and far-right parties makes budget reforms extremely difficult to implement.
Path Forward Remains Uncertain
Lecornu's hopeful tone suggests that parliament dissolution and new elections might be avoided, which would provide some stability to the embattled French political system. The premier is scheduled to meet with President Macron later today to report on his negotiations and will give an interview on France 2 television this evening.
However, as correspondent Renout notes: 'When it comes time to actually talk about painful interventions, everyone will have to show their colors. Because many parties don't want to be held responsible for a potential bankruptcy of France, but also not for cuts that will hit French voters hard.'
The coming days will be crucial for determining whether France can overcome its political paralysis and address its serious fiscal challenges, or whether the country will descend further into political and economic crisis.