On 1 October 2026, Prime Minister Sébastien Lecornu presented France’s draft budget for 2027, outlining a sweeping plan to trim the public accounts by €54 billion. Faced with a soaring debt load, the government hopes the package of tax adjustments and spending curbs will steer the deficit back on track. Yet the proposals arrive amid growing student protests over school resources and a fragmented parliamentary landscape, setting the stage for intense negotiations.
Key tax measures designed to raise revenue
The budget introduces several new levies intended to generate close to €8 billion in extra funding. First, the payroll contribution break for low- and mid-level salaries will be narrowed when workers receive bonuses such as profit-sharing, an adjustment projected to bring in about €3.8 billion. A second move freezes the tax relief on low-wage payroll contributions, adding another €2.9 billion to the coffers.
On the pension side, a cap of €3,000 on the tax exemption for retirees’ professional expenses replaces the current €4,439 limit, delivering an estimated €1.4 billion in revenue. Infrastructure funding also faces a hike: a new tax on long-distance motorway concessions is expected to yield roughly €800 million per year. Finally, the sugary-drink levy expands to cover ultra-processed foods high in sugar, a modest but symbolic €300 million addition.
Spending cuts focused on pensions, health and sick-pay
Beyond revenue, the plan carves out sizable reductions in expenditure. Pensions receive the sharpest treatment: retirees earning more than €1,260 a month will no longer see automatic inflation-linked increases, a move slated to save €4.1 billion. Complementary to this, the pension expense cap described above contributes another €1.4 billion.
Health spending is slated for a €4 billion squeeze through lower medicine prices and tighter budgeting. Meanwhile, sick-pay provisions are being re-engineered; cutting allowances for workers on medical leave aims to free €1 billion, while lowering the ceiling for accident-related sick pay could generate an additional €800 million.
Political hurdles and social backdrop
Even with the numbers in hand, the budget faces a steep climb through the French Parliament. The governing coalition lacks an outright majority, meaning it must court at least one other party to pass the text. The Socialist Party, a potential ally, has already voiced criticism and hinted at a no-confidence vote against Lecornu raising doubts about the plan’s final shape.
Simultaneously, high-school students have rolled out nationwide protests demanding better classroom conditions and resources. The budget’s austerity elements risk inflaming these demonstrations, adding a social dimension to the fiscal debate. Parliament is expected to debate the social-security portion between 20 and 26 October, after which the Senate will weigh in, potentially shuffling the bill before a final vote in December.
Whether the proposals survive parliamentary scrutiny—and how they will affect students, retirees and the broader public—remains to be seen.
