French Budget in Limbo: Key Measures Hang in the Balance as Censure Motions Loom
France’s financial future hangs in the balance as two motions of censure threaten to topple the government and derail critical budgetary measures. With just days remaining before the deadline, the fate of multiple social and economic policies accumulated in the Social Security financing bill (PFLSS) and the finance bill (PLF) remains uncertain.
The Prime Minister activated article 49 paragraph 3 of the Constitution, effectively placing the government’s responsibility on the line. This constitutional maneuver was a direct response to two motions of censure tabled in the National Assembly: one from the left-wing alliance of the New Popular Front and another from the far-right National Rally (RN) and the Union of Rights for the Republic (UDR).
Adding to the tension, the far right plans to vote on the left’s motion of censure on Wednesday, a move that could potentially result in a dramatic shift in power.
Potential Consequences If Deadlines Are Missed
The approaching deadline of December 31 presents a critical juncture. If neither the PFLSS nor the PLF are approved by then, certain provisions may face alternative pathways.
Under specific conditions outlined by parliamentary collaborators, ordinances could potentially enact these measures, provided that the delay in passing the budget can be attributed to Parliament’s actions, and that a new government can be formed.
Additionally, according to separate regulations specific to the finance bill, a special bill could be voted on to authorize the government to continue collecting existing taxes until the finance law is adopted. This special bill would be subject to expedited procedures.
Key Provisions at Risk
The uncertain future of the budget casts doubt on several key policies:
Revaluation of the Income Tax Scale
The finance bill proposes indexing the income tax scale to inflation, resulting in a revaluation “of the income brackets of the scale, as well as the thresholds and limits associated with it,” based on a 2% projection of the increase in the consumer price index excluding tobacco for 2024 compared to 2023, as outlined in the explanatory statement of the text.
“Due to the freezing of the scale, income tax would increase by almost 3 billion euros,” according to explanations from the Prime Minister’s office. Matignon cites an example: a retired couple receiving a total of €1,800 in pensions would lose €100 per year with this adjustment.
Overtaxation of the Wealthiest People
The government aimed to introduce a slight increase in taxation on the wealthiest segments of society through a differential contribution on very high incomes. The target was to establish a minimum tax threshold of 20%.
Taxation on Large Companies
The PLF also sought to implement an exceptional contribution on the profits of large companies, targeting those liable for corporate tax whose turnover equals or exceeds 1 billion euros.
Expansion of the Zero-Rate Loan
(PTZ)
A government amendment to the finance bill proposed relaxing the rules for zero-interest loans (PTZ) to support the construction and purchase of new housing. The current rules limit the PTZ to properties located in specific zones (A, A bis, or B1). The government envisioned expanding this program
What are the potential international repercussions of the political instability in France?
## France on a Knife’s Edge: A Special Report
**Host:** Welcome back to the show. France finds itself in a precarious situation as a political storm brews over the upcoming budget. Joining us to unpack this complex situation is political analyst Jean Dubois. Welcome, Jean.
**Guest:** Thank you for having me. It’s indeed a tense time in French politics.
**Host:** You’ve been following this closely. Can you give our viewers a clearer picture of what’s going on?
**Guest:** Certainly. The National Assembly is facing two motions of censure, one from the left-wing opposition and another from the far-right National Rally. This is a direct challenge to Prime Minister Barnier’s government, putting its very survival on the line [[1](https://www.lefigaro.fr/politique/en-direct-budget-2025-le-gouvernement-barnier-proche-de-la-censure-la-france-plonge-dans-l-inconnu-20241203)].
**Host:** And what are the implications of these motions?
**Guest:** Essentially, if either motion passes, the government falls. This would trigger fresh elections, throwing the country into a period of political turmoil.
**Host:** Adding to the drama, the far-right National Rally plans to vote on the left’s motion. This seems like an unusual alliance.
**Guest:** It’s definitely a strategic move. By voting for the left’s motion, the National Rally hopes to destabilize the government and capitalize on the ensuing chaos. It’s a gamble, but one they believe could pay off politically [[1](https://www.lefigaro.fr/politique/en-direct-budget-2025-le-gouvernement-barnier-proche-de-la-censure-la-france-plonge-dans-l-inconnu-20241203)].
**Host:** And what about the budget itself? The deadline is looming.
**Guest:** Unfortunately, the situation is incredibly precarious. If the motions of censure succeed, it’s unclear if the budget will be approved before the deadline of December 31st.
The alternative is the government using ordinances or passing a special bill to permit continued tax collection. However, these are not ideal solutions and could face legal challenges.
**Host:** This situation appears to have international repercussions as well.
**Guest:** Absolutely. The European press is watching closely, concerned about the potential instability in France. This situation could impact the Eurozone as a whole.
**Host:** Jean, thank you for shedding light on this complex situation. We’ll be sure to keep our viewers updated on this developing story.
