Ankara: The French government is preparing a 'reversible' budget for 2027 that aims to avoid tax hikes, manage public spending, and potentially limit increases in higher pensions, as reported by local media on Monday. Prime Minister Sebastien Lecornu emphasized that most of these measures could be reversed by the new majority resulting from the upcoming elections.

According to Anadolu Agency, Prime Minister Lecornu stated that the measures would be 'difficult' but not 'brutal' and would not entail 'major reforms.' The finance bill is set to be presented on September 30. Although the government has not established a public deficit target for 2027, Public Accounts Minister David Amiel mentioned that it should not be 'worse than that of 2025,' when it was recorded at 5.1% of the gross domestic product.

France's economy experienced a contraction of 0.2% in the first quarter of 2026, followed by zero growth in the second quarter, jeopardizing the government's annual growth target of 0.7%. Lecornu ruled out tax increases, asserting that significant fiscal decisions should be left to the government formed after the presidential election.

The budget plan outlines that state spending would continue to rise, albeit at a slower rate than inflation. Priority sectors like defense and education would be protected, with defense receiving an additional £6.4 billion ($7.5 billion) and education an £800 million increase. However, funding for employment programs, development aid, agriculture, and health could face reductions.

Additionally, the government is contemplating extending an exceptional levy on the profits of large companies for a third consecutive year. For households, while authorities have decided against freezing minimum-income benefits and smaller pensions, they are considering increasing higher pensions at a rate below inflation. Lecornu mentioned that partial de-indexation of the highest pensions remains 'on the table.'