France's 2026 budget: how new plans could affect residents
Cuts to public and administrative spending, home renovation aids, and pensions are all on government’s horizon
The prime minister will outline key points of the upcoming budget by mid-July
LE PICTORIUM / Alamy
Around €40-€50 billion of savings are required by the French government in the upcoming budget, says prime minister François Bayrou.
Several potential money-saving measures are being considered, but outright tax increases are not one of them, the prime minister confirmed in a press conference yesterday (April 15) on the upcoming 2026 budget.
The government is looking to avoid a repeat of the 2025 budget – which was not passed before the end of 2024 and was much reduced in scope by the time it did pass – by preparing the 2026 version well in advance.
Mr Bayrou announced the key points of the budget would be revealed before July 14.
This will allow several months of fine-tuning and internal debates before it reaches the Assemblée nationale and Senate at the end of the year.
The prime minister echoed comments made by his Finance Minister last week about needing to save around €40 billion, but did not go as far to confirm any courses of action to make these savings, aside from ruling out tax increases.
For his part, Finance Minister Eric Lombard wants temporary taxes on France’s highest earners to remain in place permanently.
The prime minister and government sources have outlined some areas the budget is likely to focus on, although full details are currently scarce.
Below, we look at those likely to affect Connexion readers.
1: End to eco-aids?
Mr Bayrou’s immediate predecessor Michel Barnier believed both France’s economic and ecologic situation required fixing, or an ‘environmental debt’ would be left for future generations.
Ecological programmes have taken more of a backseat for the current prime minister however, and a further cut to eco-aids for renovating buildings is likely.
It has not been confirmed, but this would probably come in the form of reduced support via the MaPrimeRénov’ scheme, which covers the majority of such aid now offered in France.
Installation bonuses and electricity buy-back levels for solar panels were recently reduced by the government.
2: Re-evaluation of pensions?
The 10% allowance applied to the tax returns of retirees could also be removed.
This flat-rate allowance is applied to pension payments, the majority source of income for many elderly people on their tax returns.
Estimates are that cutting this measure could save up to €4 billion per year for the government, although it would be an unpopular move.
3: Streamlining local administration
A major change the prime minister envisions is an end to the ‘administrative millefeuille’ for local governments.
Several overlapping administrative boundaries and a bloated public sector at the local level costs France an estimated €7.5 billion annually according to a 2024 government-commissioned report.
Addressing this would streamline local and national services, alongside freeing up the money which would help to cut the deficit.
The move would require intense work but would probably result in being the single-largest cost-cutting measure.
4: Public spending cut
Public spending “does not make citizens happy” said the prime minister, and that eventually French people would “suffer” if spending was left unchecked.
A cut of 6% in public spending between now and 2029 is on the cards, although exactly how and when this will be carried out is unclear.
Public Accounts Minister Amélie de Montchalin said that two key areas would be reducing sick-leave (or lowering state sick-pay levels) alongside reviewing public procurements.
Certain free services offered by the government may also become paid for to increase the ‘responsibility’ of residents, although a list of potential services was not given.
Money for the defence budget will be found however, seeing a €3 billion increase in next year’s budget, the prime minister announced.
5: Production and employment drive
France “does not produce enough and does not work enough,” said the prime minister during the press conference (quoted in media outlet 20Minutes).
Reindustrialisation “must become a national obsession” in France, and per-capita production increased to reach comparable levels with other EU nations – something Mr Bayrou said would greatly reduce the deficit.
An employment drive for both the younger generation and senior citizens of working age is also required, although no measures were outlined by the prime minister on how this would happen.
