French lower house rejects massively amended 2025 budget

French MPs reject amended budget with new taxes, leaving government to submit cleaned-up text to Senate for compromise.

French MPs on Tuesday (November 12, 2024) rejected a draft government budget that had been massively amended with new taxes by the opposition, as the heavily indebted country is under pressure to balance the books.

With the cobbled-together revenue bill's swingeing tax increases failing to pass the National Assembly, Prime Minister Michel Barnier's minority government now has a largely free hand in submitting a cleaned-up text to the Senate upper house, before the two chambers come together to seek a compromise.

"A majority of MPs rejects both fiscal battering and the impossibility of France living up to its European commitments," budget minister Laurent Saint-Martin said after the 362-192 vote against the text.

The lower house is divided into three similarly-sized blocs: the NFP left alliance, centrists and conservatives supporting the government, and the far-right National Rally (RN).

Over the weeks of debate, lawmakers transformed Barnier's original 60-billion-euro ($64 billion) plan to right the public finances, made up of 40 billion in spending cuts and 20 billion in new tax receipts.

Appointed by French President Emmanuel Macron, Mr. Barnier is looking to restore confidence as global rating agencies eye downgrades to France's creditworthiness.

Downgrades could increase the interest burden from France's massive debt pile still higher than its present 50 billion euros annually — the second-largest line item in government spending behind education.