France’s Socialist Party has warned that it will file a no-confidence motion by Monday if the government fails to include a higher tax on billionaires in the 2026 budget. Party leader Olivier Faure said the Socialists had shown restraint in not censuring Prime Minister Sebastien Lecornu so far but added that “if there is no change by Monday, it’s all over.” Talks on the budget’s tax and revenue measures began Friday in the National Assembly, with the Socialists accusing the government of unfairly targeting retirees, young people, and families.

The standoff poses a serious threat to Lecornu’s weak minority government, which relies on shifting alliances to pass key legislation. The Socialists hold enough parliamentary influence to bring down the administration if they join forces with both the far left and far right, who have also called for Lecornu’s removal. The prime minister had previously gained Socialist support by scrapping a controversial pension reform but now faces renewed demands for wealth redistribution.

The political uncertainty adds to growing concerns about France’s economic stability. Business activity in the country declined faster than expected in October, and Moody’s is set to review France’s credit rating after S&P Global issued a surprise downgrade last week. Lecornu, under pressure to cut the euro zone’s largest deficit, plans to reduce spending by over €30 billion next year to bring the shortfall down to 4.7% of GDP. A formal vote on the income portion of the budget is scheduled for November 4.

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French Prime Minister Sebastien Lecornu announced his new cabinet on Sunday, retaining most of his previous top ministers despite pledging “renewal and diversity.” Reappointed just last week after a short 27-day tenure, Lecornu kept key figures such as Finance Minister Roland Lescure, Foreign Minister Jean-Noel Barrot, and Justice Minister Gerald Darmanin. Catherine Vautrin, a centre-right veteran, replaced Lecornu as defence minister, while Laurent Nunez, Paris police chief and former intelligence head, took over the interior portfolio.

The reshuffle comes at a critical moment as France faces a deep political crisis and urgent budget deadlines. Hard-left France Unbowed (LFI) and the far-right National Rally have announced no-confidence motions, setting up a tense parliamentary vote later this week. The Socialist Party, whose backing is vital for the government’s survival, remains undecided, with leader Olivier Faure declining to comment on the new appointments.

With France’s parliament fractured into opposing ideological blocs, Lecornu must steer the upcoming budget through treacherous negotiations. Key opposition demands include repealing Macron’s pension reform and reintroducing a wealth tax, both resisted by conservatives. Acknowledging the political uncertainty, Lecornu said he would not hesitate to resign again if “conditions were no longer met,” signalling the fragile balance of power in French politics.

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France’s credit rating has been cut by Fitch to A+ from AA-, its lowest on record, casting a shadow over newly appointed Prime Minister Sebastien Lecornu as he begins budget negotiations. Fitch cited political instability and rising debt for the downgrade, which comes just days after President Emmanuel Macron named Lecornu as his fifth prime minister in two years. While markets reacted calmly, analysts warned the move raises fresh risks ahead of upcoming reviews by Moody’s and S&P.

The downgrade complicates the government’s efforts to present a draft 2026 budget to parliament by early October. Lecornu faces the daunting challenge of balancing investor demands for spending cuts with pressure from unions, who have called nationwide strikes this week, and political blocs divided over tax and reform strategies. In his first interviews, Lecornu scrapped unpopular holiday cuts but left the door open to higher taxes on the wealthy, a move opposed by business groups and conservatives but supported by the Socialists as a condition for backing his government.

With France’s deficit at 5.4% of GDP, Lecornu has pledged to put public finances on a “healthy trajectory,” though he admitted the budget may not fully reflect his own convictions. Employers’ federation MEDEF has threatened mass mobilization against any wealth tax, while the far-right National Rally renewed calls for fresh elections. Analysts warn that continued political gridlock could lead to another downgrade, increasing borrowing costs and straining Macron’s already fragile government.

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