Macron humiliated as economic watchdog issues damning verdict on budget plans

France's independent fiscal watchdog has issued a dire warning over the economy amid a turbulent time for the government. Prime Minister Sebastien Lecornu, who was reappointed last Friday after resigning at the beginning of the week, presented a 2026 budget bill to parliament on Tuesday. He faces a potential no-confidence vote if his leftist opponents reject his budget plans, and the economy has been particularly unstable recently due to the political unrest.

To make matters worse, the Haut Conseil des Finances Publiques said the government's budget plans "may simply not materialise". France's economy had a budget deficit nearly double the European Union's 3% limit last year, and a debt-to-GDP ratio heading towards 118%.

Mr Lecornu's budget aims to bring down the deficit to between 4.7% and 5% of GDP - a slight improvement from this year's 5.4%.

The Haut Conseil said it focuses on cuts to corporate tax breaks, tighter rules on social welfare contributions, and new levies in the hopes of saving a whopping €30 billion (£26 billion).

This is made up of €17 billion in spending cuts and nearly €14 in new taxes - equivalent to 1% of gross domestic product.

The Haut Conseil added: "Overall, the public balance forecast for 2026 submitted to the Haut Conseil is weakened by an optimistic economic scenario and, more importantly, by the risk that the projected revenue and savings measures may be under-delivered - or may simply not materialise at all."

The French government predicted the economy will grow 1% in 2026 due to stronger private demand.

Getting the economy under control appears to be increasingly challenging amid the political turmoil, which has increase the risk premium on French bonds and put credit ratings under pressure.