French Government Faces Renewed No-Confidence Threat Amidst Budget Talks and Wealth Tax Demands

Socialist Party Issues Ultimatum Over Wealth Tax

The French government, led by Prime Minister Sébastien Lecornu, is facing a fresh no-confidence threat from the Socialist Party (PS). The opposition party has declared its intention to file a no-confidence motion if its demands for a higher tax on billionaires are not incorporated into the upcoming 2026 budget. This ultimatum was issued as discussions for the 2026 budget commenced, intensifying the political pressure on Lecornu's minority government.

Olivier Faure, the Socialist Party chief, stated that the government's minority status could lead to its downfall unless significant changes are made to the 2026 budget. The Socialists argue that the current budget proposals unfairly burden retirees and young people while sparing the nation's wealthiest citizens.

Lecornu's Government Navigates Budget Debates

Prime Minister Sébastien Lecornu, who was re-appointed on October 10, 2025, after a brief resignation, has already navigated a turbulent political landscape. His government survived two no-confidence votes on October 16, 2025, motions primarily brought by the hard-left La France Insoumise and the far-right National Rally. The survival of these votes was partly due to the Socialist Party leadership's decision to abstain from joining the La France Insoumise motion, following Lecornu's pledge to suspend pension reforms.

However, the current threat from the Socialists specifically targets fiscal policy. The Socialist Party has consistently advocated for a 'billionaire's tax,' often referencing proposals like the 'Zucman tax' – a 2% levy on fortunes exceeding €100 million, or a 'Zucman Light' version taxing fortunes over €10 million at 3%. In contrast, Lecornu's government has explicitly ruled out reintroducing a wealth tax and has proposed taxing wealth management holdings above €5 million, while excluding business assets.

Broader Political Instability in France

The ongoing political tensions highlight the deep divisions within the French parliament, which has been in a state of flux since snap elections in June 2024 resulted in a hung parliament. With no single bloc holding an absolute majority, the government frequently relies on complex negotiations and concessions to pass legislation.

The debate over the 2026 budget, which officially opened on October 24, 2025, is expected to be particularly contentious. Prime Minister Lecornu has committed to not using Article 49.3 of the French Constitution to force the budget through without a parliamentary vote, a mechanism that has historically triggered no-confidence motions. This commitment means his government will require significant opposition support to pass the budget, making the Socialist Party's stance on a wealth tax a critical factor in the coming weeks.