France rushes emergency budget law to avert shutdown after talks collapse

PARIS, Dec 22 (Reuters) - France’s government will push lawmakers to approve emergency legislation to keep the state running into January after they failed to agree on a 2026 budget, a stopgap measure to avert a shutdown as pressure mounts from investors and ratings agencies.

Government spokesperson Maud Bregeon said on Monday the special law aimed to give final negotiations a chance.

A joint committee of lawmakers from both chambers failed on Friday to hammer out a full 2026 budget bill, forcing French Prime Minister Sebastien Lecornu to seek this stopgap measure to extend spending, tax collection and borrowing into January.

"This special law is not a budget ... we must, as quickly as possible, in January, come up with a budget for the country," Bregeon added, quoting French President Emmanuel Macron.

Parliament was likely to approve the measure on Tuesday.

Investors and ratings agencies are scrutinising France's finances, with the country running the euro zone's highest budget deficit.

LECORNU WANTS TO AVOID CONFIDENCE VOTE

Conservative lawmaker Philippe Juvin, who has been steering the 2026 budget through the lower house, said he expected a full text to be passed in early January.

Juvin told BFM TV he hoped Lecornu would use special constitutional powers to force through a compromise text that could be amenable to Socialist lawmakers.

Lecornu had pledged not to use such powers and to do so would likely trigger a vote of no confidence from the far right or hard left, though such a motion would fail without Socialist support.

Lecornu's minority government has little room for manoeuvre in France's fractious parliament, where budget battles have already toppled three governments since Macron lost his majority in a 2024 snap election.

France used emergency rollover legislation last year until a proper 2025 budget could be passed in February, which the government says cost 12 billion euros ($14 billion).

($1 = 0.8524 euros)