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France delays key budget vote to October 27 as amendments pile up
The National Assembly pushed back its vote on the revenue half of the 2027 budget, leaving bond investors with another week of uncertainty.
HedgeWeekly News Desk ·
France's National Assembly has postponed Tuesday's vote on the tax and revenue section of the 2027 finance bill to October 27, with more than 2,000 amendments still to be debated after the first week. The chamber spent Tuesday on the separate social security financing bill instead.
The delay comes as the bill runs into resistance. Budget Minister David Amiel warned that amendments already approved would add about €10 billion to the deficit, and opposition parties are pushing back on Prime Minister Sébastien Lecornu's plan for €54 billion of savings. The draft targets a deficit of 5% of GDP next year, down from 5.4%, still well above the EU's 3% reference.
Bond markets stayed under strain. Newsquawk reported that the gap between French and German 10-year yields widened to 155 basis points on Tuesday, above a recent peak of 151 and the widest since 2012, as unrest spread. France's debt agency chief said the agency had not seen Japanese investors selling French government debt. European shares were headed for a lower close, though off their lows as energy prices eased.
Why it matters: the clock is now the main risk. Parliament has 70 days under the constitution to pass the budget, and Reuters notes that if it fails and the government avoids Article 49.3, Paris could be left rolling over the 2026 budget, which a finance ministry report said could widen the deficit by at least half a percentage point. Using 49.3 instead invites a no-confidence vote that could topple the minority government. With a presidential election due in spring 2027, funds holding French bonds or banks should watch the October 27 vote and the OAT-Bund spread as the clearest gauges of stress.