French lawmakers have rejected a heavily revised version of the proposed 2025 budget, intensifying discussions on strategies to address the country’s financial shortfall as the budget now moves to the Senate for further review.

The revenue portion of the budget underwent substantial changes during parliamentary debates, driven by left-wing amendments introducing billions in additional taxes. The far-right National Rally party also proposed an amendment to stop France's contributions to the European Union budget, a move the government argued was unlawful.

On Tuesday, November 12, members of the Assemblée Nationale voted against the draft, which had been extensively modified by left-wing opposition parties seeking new taxes to meet fiscal goals. This outcome adds to the challenges faced by the French government as it tries to stabilize the nation’s debt, with France's massive debt load closely watched by global rating agencies.

Prime Minister Michel Barnier's administration, though a minority government, now has the flexibility to present a revised version to the Senate. The lower house, divided among the left-wing Nouveau Front Populaire, Macron’s coalition, and the far-right Rassemblement National, failed to find consensus, voting 362-192 against the proposal. This division highlights the struggle over fiscal reforms as France works to balance its budget and meet its European commitments.

The original €60-billion budget plan, introduced by Barnier and intended to address France’s financial imbalances, included €40 billion in spending cuts and €20 billion in additional tax revenue. However, left-leaning parties, such as La France Insoumise, Socialists, Greens, and Communists, opted for adding numerous taxes while rejecting spending reductions, leading to a highly altered version of the budget.

Amid the budget standoff, the government’s goal to stabilize the national debt is under increased scrutiny as concerns rise over potential downgrades to France’s credit rating. Downgrades would further increase the interest burden on France’s debt, which already costs the government around €50 billion annually.

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