Macron Enacts Emergency Budget Law to Extend 2025 Funding: France Faces Crucial Start to 2026

Macron Signs Special Budget Law to Keep France Running into 2026

President Emmanuel Macron has signed an extraordinary budget extension law, ensuring France can continue operating into 2026 despite the absence of an approved national budget. The decision, published in the Official Journal on Saturday, comes as France faces political paralysis following months of gridlock in Parliament.

The law gives the government the power to maintain state operations using 2025’s financial framework, guaranteeing that public services — from healthcare to education and transport — remain funded. However, the measure also imposes strict fiscal restrictions, limiting flexibility and delaying new spending initiatives.

Political Deadlock Deepens

The stopgap measure follows the failure of budget talks between the National Assembly and the Senate on December 19. Lawmakers could not find common ground on how to balance France’s soaring deficit with growing public spending needs.

This marks another setback for Macron’s government after snap elections in 2024 left him without a clear majority. In an address to ministers, Macron urged unity, insisting France “must provide the nation with a proper budget as soon as possible in January.”

Prime Minister Sébastien Lecornu also expressed hope, saying he believes Parliament can approve a full 2026 budget “if political calculations are set aside.”

Temporary Budget Rules and Strict Limits

Under the special budget law, France will:

Collect taxes at 2025 rates, with no new levies permitted.
Continue essential public services such as healthcare, education, and security funding.
Freeze new spending projects and block increases in existing budgets.

This effectively means Macron’s long-term €6.5 billion defense investment plan — intended to strengthen France’s military readiness by 2027 — remains on hold.

France’s Deficit Remains a Major Challenge

France’s deficit is projected at 5.4% of GDP for 2025, the highest in the eurozone. The government’s strategy had been to bring that figure below 5% in 2026 through spending cuts and revenue reforms.

However, those plans are now paused under the emergency framework. This creates tension with the European Union’s fiscal rules, which call for stricter budget discipline across member states beginning in 2026. Economists warn that extending the provisional budget could weaken investor confidence and make it harder for France to borrow at favorable rates.

Repeating 2024’s Political Stalemate

This is not the first time France has resorted to emergency financial management. A similar law was enacted in late 2024 following the collapse of Michel Barnier’s government, which cost the state an estimated €12 billion in delayed reforms and inefficiencies.

Unless lawmakers can agree on the 2026 budget early in the new year, France risks falling into another period of fiscal uncertainty — potentially stalling reforms in energy, defense, and public infrastructure.

What Expats Should Know

For English-speaking residents and expats living in France, the extended budget law means continuity without significant change in the short term. Here’s what it means practically:

Public services such as healthcare (Sécurité Sociale), transport networks, and education will operate as usual.
Taxes and contributions will continue at 2025 levels, so no immediate changes in income tax, property taxes, or local charges.
Financial aid and benefits — including housing and family allowances — remain in place without disruption.

However, any new initiatives (such as energy subsidies, pension adjustments, or tax credits for renovation projects) are delayed until a full 2026 budget is passed. This could affect those planning to invest, renovate, or apply for new benefits early in the year.

In short, day-to-day life remains stable, but major policy adjustments — including those that might benefit homeowners or small businesses — are temporarily frozen.

Looking Ahead

Budget negotiations are expected to resume in early January 2026, with heavy pressure on the government to reach an agreement before the end of the first quarter. For now, Macron’s emergency measure avoids administrative chaos — but it also underlines the fragility of his political position heading into what could be a decisive year for France’s economic stability.