A step forward… The National Assembly adopted on second reading Tuesday, December 9, the Social Security Financing Bill (PLFSS) for 2026, with an extremely tight count of 247 votes for and 234 against. This validation, obtained without the use of Article 49.3 of the Constitution, constitutes a form of political success for Prime Minister Sébastien Lecornu, who managed to rally the votes of the majority, MoDem, LIOT, and especially a large part of the Socialists and several deputies from Les Républicains (LR) and Horizons. This adoption clears the way for the rest of the budgetary calendar, not without leaving behind notable economic, political, and social consequences.
Key points of this article:
The National Assembly adopted the Social Security financing bill for 2026 with a narrow majority and without resorting to Article 49.3.
The text provides for an increase in the taxation of capital to reduce the deficit of Social Security, while excluding certain major savings products.
Always more taxes in this bill
The first stake of this budget lies in its impact on public accounts. The Minister of Economy, Roland Lescure, welcomed the fact that the text allows for limiting the deficit of Social Security 'to around 19.5 billion euros, compared to an initial forecast of 30 billion euros in the event of non-vote'. This improvement nevertheless requires a contribution from the State of 4.5 billion euros to replenish the coffers.
One of the most discussed measures, stemming from a compromise with the Socialist Party, concerns the taxation of capital. The text thus provides for an increase of 1.4 percentage points in the CSG on part of the income from wealth, and the rate on these products thus rises from 9.2% to 10.6%.
This increase, intended to finance autonomy and dependence, translates into an increase in the flat tax (PFU), or Flat Tax, which rises to 31.4% (up from 30% currently) on the affected products, such as dividends and capital gains on securities held in stock accounts, but also on our dear cryptocurrencies.
It is crucial to note that a compromise amendment has excluded the major savings products for households from this increase, notably life insurance, real estate income, and regulated savings plans. But until when?
Always more taxes on the agenda of this Social Security financing bill
Social compromises: Pensions and health
In order to guarantee the vote, the government had to agree to major social setbacks and advances that will have concrete repercussions:
New family provisions: The text provides for the entry into force, brought forward to January 1, of parental leave: two months paid for each new parent, cumulative with existing maternity and paternity leave.
Suspension of the pension reform: The emblematic measure of the Borne government, aimed at increasing the legal retirement age by one quarter each year, is suspended. The legal age remains at 62 years and 9 months until its potential restart in 2028. The number of quarters required for a full pension is also frozen at 170. Advances have also been made for mothers, with the conversion of two 'non-contributed' quarters into contributed quarters for access to the long career scheme in the private sector.
Health and Hospital: The national objective for health spending (ONDAM) has been raised to 3% following parliamentary debates, a level considered more realistic by some but still below the 3.6% of the previous year. Unpopular measures such as the doubling of medical deductibles and the freezing of social minima have also been removed from the text.
Framework for work stoppages: To control spending on daily allowances and combat absenteeism, the text introduces a cap on the first work stoppage at a duration of one month, requiring a new medical consultation for its renewal.
All this for that, the vote on this PLFSS kept the press on edge for over 24h – Source: Account X
Perspectives and upcoming deadlines
The adoption of the PLFSS 2026 is obviously just a step as the text now needs to undergo a shuttle process with the Senate, in view of a Joint Mixed Commission (CMP). According to many observers, the text is not expected to be adopted as is by the upper house, and it may therefore be that the Assembly has to vote again in a week on this same text.
Eyes are now turned towards the examination of the Finance Bill (PLF) for the state budget, a text that is politically even more divisive. The government, which wishes to avoid resorting to Article 49.3, has indeed considered the possibility, in the event of persistent blockage, of submitting a temporary special law implementing the budgetary choices of the previous year for 2026.
The economic press is up in arms against this bill that solves very little – Source: Account X
The great fatigue of the French
This strategy reflects the ongoing difficulties of the Executive in securing a stable majority in the Assembly since the dissolution announced by President Macron on June 9, 2024. This decision will have profoundly and durably weakened the current power and has placed the country in a form of political wandering for more than a year.
This morning, in the press and media, you will find a large part of the representatives of the presidential majority and their (one-day) allies congratulating themselves on the adoption of this Social Security Financing Bill (PLFSS) that spares France from a so-called mortifying 'blockage'. In contrast, the RN and LFI will cry out about 'political maneuvering and backroom deals' and will continue to demand the departure of Emmanuel Macron.
On the other hand, what you will not find is the fatigue of the country's active forces, social workers and field officials, entrepreneurs, young graduates, small employees, and farmers who want answers to their everyday problems and who hoped for a direction for the country. But that is clearly not on the agenda of discussions among our representatives. One step forward, two steps back.
#FranceEconomy #budget #SecurityAlert
