The French Socialist Party which holds a swing position in the hung parliament has threatened to trigger a no-confidence motion on Monday.
They insist the minority government must commit to “fiscal justice” which includes a new tax on the super-rich.
The so-called “Zucman tax” entails a 2-percent annual levy on fortunes above €100 million.
Socialist Party leader Olivier Faure warns that if the tax is not in the 2026 State budget, his party will vote against the government.
Speaking at the National Assembly in Paris, Prime Minister Sebastien Lecornu acknowledged that the budget presented by the government is imperfect but he asked members to "not compromise the future of the country.”
He promised to cut the deficit by point-four percent year-over-year from the current 5.4, and said it “must return to below 5-percent next year."
He also pointed to a bill combatting tax and social security fraud so the State can “recover money from those who commit fraud or abuse."
For military spending, Lecornu proposed hiking the budget by 6.7 billion euros to “guarantee peace for ourselves and our continent”
Since last year’s legislative election produced a fractured assembly, President Emmanuel Macron’s administration survived through manoeuvres and concessions—lacking a stable base.
The Socialists’ threat to topple the government proves how fragile today’s French executive arm is.
While the party’s proposed tax on billionaires could help the French economy, Macron’s centrist coalition worries about the economic implications of scaring off high-net-worth individuals and investment.
Many high-profile billionaires have already threatened to leave France if the Zucman tax becomes a reality.
This may seem like an internal French drama, but the implications extend beyond the country’s borders.
A government collapse or a deeply weakened one, would undermine France’s ability to lead EU initiatives, from defence to climate to economic reform.
As for Investor confidence & markets, the country already faces pressure with its credit rating.
The examination of the revenue portion of the budget starts today in the National Assembly chamber.
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