Political crisis in France: Special financial law as a temporary solution
by Mégane Mullebrouck and Matthieu Van Gucht
France is currently facing a political crisis caused by tensions surrounding the Social Security Financing Bill for 2025. On December 3, a successful vote of no confidence in the National Assembly led to the fall of the government. While the fall of the government did not automatically annul the ongoing Financial Law for 2025, it has become clear that the bill no longer enjoys political support. The proposal, submitted on October 10, was rejected during its first reading in the National Assembly on November 12. The Senate was still debating the bill when the government collapsed, but President Macron has declared further discussions pointless.
Special Financial Law for 2025
To prevent France from being left without a budget, President Macron announced the introduction of a special Financial Law for 2025. This temporary and pragmatic law will maintain the tax rules from 2024 unchanged in 2025, without adding new taxes or expenditures.
This measure provides the new government with time to draft a fully revised Financial Law. Macron has indicated that this new proposal, expected in early 2025, will focus on significant adjustments, such as:
Indexing income tax brackets to offset the effects of inflation;
Potential retroactive measures, the details of which remain unclear.
What lies ahead?
The coming weeks will be crucial for forming a new government and drafting a budget that can secure approval from both the National Assembly and the Senate. Macron concluded his speech with a commitment to act in France’s best interests despite the ongoing political uncertainty.
With this temporary solution, France aims to ensure stability while working toward structural reforms for the future.
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Mégane Mullebrouck
Advisor Accountancy megane.mullebrouck@vandelanotte.fr
Matthieu Van Gucht
Team Manager Accountancy matthieu.vangucht@vandelanotte.fr
Disclaimer
In our opinions, we rely on current legislation, interpretations and legal doctrine. This does not prevent the administration from disputing them or from changing existing interpretations.
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