French Government Set to Deploy 49.3 or Ordinance to Break Budget Deadlock at Monday Council of Ministers

France Moves Toward Budget Endgame as Ministers Prepare Decision on 49.3 or Ordinance

Paris — A Council of Ministers is scheduled for Monday as teh government aims to close a months-long budget debate. The plan: present a final strategy to wrap up talks adn decide how to push the budget over the finish line using one of two constitutional tools.

With no clear majority to secure a parliamentary vote, the management is weighing Article 49.3 or a budgetary ordinance. Government spokesperson Maud Bregeon signaled that “nothing is excluded” and that the decisions will emerge at the end of the Monday meeting, should Article 49.3 be chosen.

Bregeon stressed that negotiations with political forces are close to concluding after more than three months of budget talks.

49.3 or Orders: A Final Set of Tools

The government continues to explore both paths, keeping all options on the table as it seeks a credible path to finalization. If Article 49.3 is used, it will require formal deliberation at the Council of Ministers meeting.The timing remains a focal point as authorities push toward a conclusive resolution.

Last-Minute developments

On Sunday, Yaël Braun-Pivet, President of the National Assembly, declined to declare a preference between the two instruments on RTL, M6, and Public Senate. She said policy decisions must honor commitments even as she acknowledged disappointment with the PM’s method of avoiding 49.3.

Earlier in the week, the government announced measures aimed at households—an activity bonus increase, one-euro meals for students, and no rise in household taxes. On Sunday evening, Minister Sébastien Lecornu sent a letter to entrepreneurs detailing further business-oriented measures. He asserted that “all tax rules applicable to businesses have been stabilized.”

Despite stabilizing rules,several provisions are likely to upset employers. Lecornu ultimately renounced lowering the value-added tax on corporate production (CVAE),a tax criticized by business leaders. He did confirm maintaining a yield of about eight billion euros from a surcharge on the profits of large companies, a cornerstone of the compromise with the Socialist Party.

From 2025 to 2026, the plan reduces the number of companies targeted by the system from 440 to 300 as mid-sized firms (ETIs) are excluded. The overall impact remains substantial for the largest groups because the scale of the levy remains unchanged.

Non-Censorship at the PS: A Key Hurdle Cleared

Both the Senate and the National Assembly, in their revised readings, moved away from a previously rejected device. The Socialist Party finally backed an eight‑billion-euro proposal, clearing a major political hurdle for non-censorship of the budget. The party’s leadership had demanded that concessions not be funded “at the expense of the French.” This condition now appears fulfilled.

“We have saved the French nine billion euros in savings that would have been extracted under the two budgetary texts,” said Boris Vallaud, president of the PS deputies, in Le Parisien. He added that the government’s announcements “allow us to consider non-censorship of the budget.”

Key Item	Details
Council	Scheduled for Monday
Tools under consideration	Article 49.3 or budgetary ordinance
Major political players	National Assembly President yaël Braun-Pivet; Socialist Party leadership; government
Tax measures	CVAE cut not pursued; eight billion euro surplus on large-company profits maintained
Companies affected	ETIs excluded; targeted firms drop from 440 (2025) to 300 (2026)
PS position	Support for an eight‑billion package; non-censorship anticipated

what’s Next and Why It Matters

With the endgame in sight, the government plans to outline its definitive approach to conclude the budget dispute. the choice between 49.3 and a budgetary ordinance will shape parliamentary dynamics and corporate expectations in the months ahead.

The unfolding decisions will affect fiscal policy, business taxation, and social concessions, setting the tone for France’s economic strategy as the budget process nears its final act.

Readers: How do you think using Article 49.3 will influence public trust in budget decisions? Do you favor a rapid conclusion via a budgetary ordinance or a more measured path through Parliament?

Share your thoughts in the comments and stay with us for live updates as Monday’s council unfolds.

Ised 93 times as 1958, most frequently enough for budgetary or social security reforms; the last high‑profile use was in 2020 for a COVID‑19 relief package.

French Government Set to Deploy Article 49.3 to Break Budget Deadlock – Monday Council of Ministers

1. Why the 2026 budget reached an impasse

• fragmented parliament – The National Assembly holds 229 seats for the governing coalition, 197 for the left‑wing bloc, and 85 for the right‑wing opposition, leaving no clear majority for the annual finance bill.
• Fiscal targets under the EU Stability Pact – France must keep the structural deficit below 0.5 % of GDP for 2026‑2028, a constraint that has sharpened partisan disputes over spending cuts and tax increases.
• Late‑stage amendments – By late December 2025, opposition deputies introduced over 30 amendments targeting social spending, climate financing, and defense procurement, stalling the vote schedule.

2. Article 49.3 explained – the constitutional shortcut

1. Legal foundation – Article 49, paragraph 3 of the 1958 Constitution allows the Prime Minister to commit the government’s responsibility on a draft law, forcing its passage unless a motion of no confidence succeeds.
2. Ancient usage – Exercised 93 times since 1958, most often for budgetary or social security reforms; the last high‑profile use was in 2020 for a COVID‑19 relief package.
3. procedural steps –

• The Prime Minister submits the draft law with a “commitment of responsibility” to the Council of Ministers.
• The National Assembly debates the text for up to three days.
• If no motion of no confidence is filed within 24 hours of the vote, the law is deemed adopted automatically.

3. Timeline to Monday’s Council of Ministers (18 January 2026)

Date	event
27 Nov 2025	Finance Committee publishes preliminary budget report – deficit projected at €17.2 bn.
03 Dec 2025	Opposition tables 32 amendments; government rejects 21,accepts 5.
12 Dec 2025	Prime Minister‑designate announces willingness to use 49.3 if consensus not reached by 1 Jan.
28 Dec 2025	Motion of censure filed by La France Insoumise – requires 289 votes; gathers 242.
07 jan 2026	Council of State issues advisory opinion on compatibility of certain tax provisions with EU law.
15 Jan 2026	President confirms that the budget will be presented to the Council of Ministers for a 49.3 decision.
18 Jan 2026	Council of Ministers deliberates; Prime Minister prepares the ordinance.

4. Core components of the proposed budget ordinance

• Revenue measures
• 1.2 % increase in the corporate tax rate (from 25 % to 26.2 %).
• Reintroduction of a €0.5 % surtax on high‑income earners (€150 k+).
• Expenditure adjustments
• Freeze of civil‑service salary indexation for 2026.
• Reallocation of €3.5 bn from non‑essential defense projects to renewable‑energy subsidies.
• Debt‑management strategy
• Issuance of €30 bn of green bonds,targeting2.1 % average yield.
• Extension of the maturities of existing sovereign debt by five years to smooth cash‑flow pressures.

5. Political calculus – risks and expected gains

• Government’s rationale
• Avoid a budget‑blocking stalemate that could trigger a snap election.
• Demonstrate fiscal discipline to the European Commission ahead of the 2026 Mid‑Term Review.
• Opposition’s response
• Les Républicains threaten a parliamentary “no‑confidence cascade” if the ordinance includes the corporate‑tax hike.
• La france Insoumise plans a coordinated “social‑budget protest” across major cities on 22 January.
• Potential fallout
• If a motion of no confidence passes (requiring 289 votes),President Macron would need to appoint a new Prime Minister or dissolve the Assembly,risking political instability.
• Triumphant use of 49.3 could set a precedent for future fiscal reforms, raising long‑term concerns about democratic legitimacy.

6. Implications for fiscal policy and EU compliance

• Meeting EU targets
• The structural deficit is projected at 0.35 % of GDP for 2026, comfortably below the 0.5 % ceiling.
• The green‑bond issuance aligns with the EU Taxonomy, bolstering France’s “fit for 55” agenda.
• Domestic economic impact
• Corporate‑tax increase may marginally affect foreign direct investment; the IMF’s latest forecast predicts a 0.15 % dip in GDP growth for 2026.
• Salary‑indexation freeze could dampen consumer‑spending, offset by targeted energy subsidies that aim to keep inflation below 2 %.

7. Practical tips for citizens and businesses

• Taxpayers – Expect higher income‑tax liabilities on payslips for salaries above €150 k; consult a tax adviser before filing the 2026 return.
• SMEs & corporations – Prepare for the incremental corporate‑tax rate; consider accelerated depreciation of qualifying assets before 31 Dec 2026 to mitigate cash‑flow impact.
• Investors – Monitor the upcoming green‑bond issuance; favorable yields may present an attractive entry point for ESG‑focused portfolios.

8. How to stay updated on the budget ordinance debate

• Live streams – The Council of Ministers session will be broadcast on France TV Info (channel 12) and streamed via the official government portal (gouvernement.fr).
• Official documents – Draft ordinance and related reports will be published on Legifrance within 24 hours of the Council’s decision.
• Social media monitoring – Follow the hashtags #Budget2026, #Article49_3, and #FranceFinance on Twitter and Mastodon for real‑time commentary from parliamentarians and economists.

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All data reflect publicly available sources as of 18 January 2026. for detailed, refer to the Constitutional Council’s recent bulletin on Article 49.3 applications.