France's National Assembly will keep debating the revenue section of the 2027 budget on Tuesday instead of holding the planned vote. The delay comes as Fitch cuts its outlook on the country's credit rating and lawmakers work through several crypto tax proposals.
Second delay for the revenue vote
The Assembly's end-of-session notice after Monday's sitting lists questions to the government and continued debate on the revenue section, with 758 amendments still to be examined. It is the second postponement. Le Monde reported that the original Oct. 20 vote was pulled with more than 2,000 amendments pending.
The Assembly has until midnight on Nov. 17 to finish its first-reading examination. If the revenue section is rejected, the government's original proposal goes to the Senate without the amendments MPs adopted.
The constitution gives Parliament 70 days in total to examine a budget bill, with the Assembly holding the first 40 under Article 47. The Senate then takes up the text before it returns to the lower house for a final vote.
The finance committee massively rejected the bill on Oct. 9. The 89-article text contains no major reform. It would cut the public deficit from 5.4% to 5% of GDP, the target France already set for 2026 and that Prime Minister Sebastien Lecornu now expects to miss. Reuters reported that Budget Minister David Amiel warned the amendments already approved would widen the deficit by 10 billion euros. The government is seeking 54 billion euros in savings.
Crypto proposals rejected and pending
On Friday the Assembly rejected two proposals that would have taxed unrealized crypto gains when taxpayers move their tax residence abroad. The first, which would have added crypto assets to the existing exit tax regime, failed with 27 votes in favor, 55 against and one abstention, according to the Assembly's voting record.
The second drew 31 votes in favor and 60 against. It targeted unrealized gains on household crypto holdings above 800,000 euros ($897,000) for taxpayers who had been French tax residents for at least six of the previous 10 years.
France's current exit tax applies to unrealized gains on securities above the same 800,000 euro threshold. The rejected amendments would have extended that logic to crypto.
Other measures are still waiting. One would require taxpayers to report self-custodied crypto worth at least 100,000 euros ($112,000) combined, based on year-end value. Another would exempt gains on crypto payments for goods and services if they total no more than 1,000 euros ($1,120) in a tax year.
Lawmakers did approve one measure on Oct. 16, which taxes gains when crypto is converted into fiat-pegged stablecoins. It has not become law.
French law has taxed crypto gains only when assets are sold for fiat currency, so swaps between tokens have so far gone untaxed. The stablecoin amendment would change that for conversions into stablecoins.
Fitch lowers France's outlook
Fitch kept France's rating at A+ but cut its outlook from stable to negative, citing weaker growth, higher borrowing costs and a larger deficit than at its August review. Euronews reported that Insee figures showed GDP fell 0.1% in the third quarter after stagnating in the second and shrinking 0.2% in the first.
Fitch said "the persistence of political fragmentation" and "a difficult social climate" complicate lasting fiscal consolidation. French borrowing costs are at their highest since 2022.
Economy Minister Roland Lescure said:
"This assessment confirms the absolute need to adopt by the end of the year a responsible budget that aims to restore the public finances by reducing our deficit to 5%."
Earlier that day he had told Franceinfo that France was heading "into the wall" without the budget.
What happens if no budget passes
Fitch said it expects the budget to be adopted through constitutional mechanisms despite the lack of a majority. Lescure has not ruled out Article 49.3, which passes a bill without a vote unless a no-confidence motion succeeds. Minority governments have used it since the 2024 snap election, but opposition parties are now positioning for the April-May presidential election and may offer fewer concessions.
Michel Barnier's government fell to a no-confidence vote in December 2024 after using 49.3 on the social security budget.
A second route is an emergency law rolling over the 2026 budget. A finance ministry report cited by Reuters warned this would cause "unprecedented" paralysis and could widen the deficit by at least half a percentage point.
The third is a budget by ordinance, which has never been used in the Fifth Republic. Jerome Mathis, an economics professor at Paris-Dauphine University, told Euronews that markets "generally prefer a contested decision to a prolonged absence of decision." He added that the effect would be limited if investors see an ordinance budget as fragile.
Roman Zaika
Disclaimer: All materials on this site are for informational purposes only. None of the material should be interpreted as investment advice. Cryptocurrency investments involve significant risk of loss. Please note that, despite the nature of much of the material created and hosted on this website, HODL FM operates as a media and informational platform, not a provider of financial advisory services. The opinions of authors and other contributors are their own and should not be taken as financial advice. If you require advice, HODL FM strongly recommends contacting a qualified industry professional.
