French government survives no-confidence vote

After nearly two years of political wrangling, France has approved its budget for 2026. Two opposition motions of no confidence in the government failed, allowing Prime Minister Sébastien Lecornu's minority government to survive and push through a budget that was more than a month overdue.

The budget crisis began after early elections in 2024, which resulted in a deadlocked parliament at a time of growing pressure on public finances.

Lecornu secured the support of the Socialists with a series of targeted concessions, notably by suspending the unpopular pension reform and postponing the increase in the retirement age.

Although the deficit remains at around five percent of GDP, the markets reacted calmly and the risk premium on French debt fell.

(reuters, mja)