The rejection of the surtax on large businesses indicates a growing divide between the government and both opposition parties and some of its own members, suggesting that the ruling coalition may need to reassess its approach to budgetary measures.
The collaboration between the left and the RN to oppose government initiatives reflects a strategic alignment that could pose further challenges for the government in future legislative efforts.
The potential use of Article 49.3 could be a double-edged sword for the government, allowing it to bypass Assembly debates but also risking backlash from both the opposition and segments of the public who favor parliamentary debate.
If the government resorts to Article 49.3, it may face increased political tension and public dissatisfaction, potentially affecting its standing in future elections.
The ongoing difficulties in passing the budget could lead to more significant fiscal challenges for the government, impacting its ability to fund essential services and initiatives in 2025.
The political landscape may shift further as parties recalibrate their strategies in response to the government's budgetary struggles, possibly leading to new alliances or realignments.
The French government is facing significant challenges in passing its 2025 budget, as the National Assembly has rejected key components of the proposed finance bill. On Friday, the Assembly voted against an exceptional surtax on large companies, a measure intended to generate substantial revenue for the state. This decision came as opposition parties collaborated, with the left's amendments leading to increased tax rates that the government had strongly opposed. The rejection of this surtax, which was expected to yield 8 billion euros in 2025 and 4 billion euros in 2026, raises concerns about the government's fiscal strategy and its ability to meet budgetary goals.
In the ongoing debates, the government has also faced setbacks regarding the maritime freight sector, where deputies decided to make permanent an exceptional contribution and cap tax loopholes for shipowners, despite the Minister of the Budget's objections. The political landscape within the Assembly has been characterized by shifting alliances, with the National Rally (RN) and leftist parties uniting against the government's proposals, highlighting a fragmented support base for the ruling coalition.
As discussions continue, the government may be forced to invoke Article 49.3 of the French Constitution, which would allow it to pass the budget without a full vote in the Assembly. This scenario is increasingly likely, as the Assembly is struggling to process the multitude of amendments and proposals, with over 1,850 still pending. The deadline for reaching a decision is fast approaching, and if the Assembly fails to act within 40 days, the budget will be referred to the Senate for consideration.
