The French Prime Minister intends to freeze the pension reform approved by Macron until 2027

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The French Prime Minister has pledged to suspend President Emmanuel Macron’s unpopular pension reforms in a last-ditch effort to secure parliamentary support for the 2026 budget and salvage his premiership.

Into a big left break and a U-turn MacronKey economic policy chief Sebastien Lecornu said on Tuesday he would suspend plans to raise the retirement age to 64 until 2027, when the presidential election comes. He added that the parties must agree on other savings to keep the deficit next year at less than 5 percent of the national product.

“Is the government ready for a new discussion on pension reform? The answer is yes,” Lecornu told lawmakers in his first speech to parliament, in which he also promised additional corporate taxes and a new approach to holding parliamentary debates on all government proposals.

The prime minister, who resigned last week only to be reappointed days later by Macron as France’s political crisis escalated, is struggling to meet the demands of various factions in the hung parliament in exchange for their support for his proposals on how to reduce France’s high public deficit next year.

The Socialist Party, on which Lecornu depends for its survival, had urged the government to freeze the controversial 2023 reform that gradually raises the retirement age by two years to 64 years. Lecorno said the suspension would cost 400 million euros in 2026 and 1.8 billion euros in 2027.

The French budget has become a central battleground in the country’s political crisis, as arguments crystallize in the pending National Assembly.

Without a deal, France could avoid a US-style lockdown and push this year’s budget into 2026, but the disputes have unnerved markets already wary of massive deficits and caused the downfall of three French governments last year.

Socialist MPs praised Lecornu’s commitments on pensions, while prominent conservative MP Laurent Voquiez said the country needed a budget before the end of the year, opening a narrow path towards his government’s survival.

The Prime Minister outlined a financial package worth 30 billion euros to reduce spending and increase taxes, aiming to raise the deficit to 4.7 percent of national output in 2026 from 5.4 percent this year. The Prime Minister said everything was up for discussion and the target could be relaxed, although he urged the parties to agree to keep the deficit below 5 percent.

While he refrained from announcing a comprehensive tax on wealth, which businessmen will impose have raised concerns aboutThere will be “exceptional contributions from large fortunes” and fees on holding companies that can sometimes evade taxes on dividends, LeCorno said.

The government is set to extend a measure to increase corporate taxes, which has had an impact They have already been used in 2024 and 2025 To balance the budget but it was meant to be temporary – a move likely to alienate major French companies.

“There will be tax cuts for small and medium-sized companies and there will be targeted and exceptional tax increases for some very large companies… to better share efforts among shareholders,” he said.

During his speech to Parliament, Lecorno also made another concession to the Socialist Party. Reiterating a pledge he made before the collapse of his first government, he said he would not use constitutional clause 49.3, which enables the government to impose legislation without a parliamentary vote.

He repeated on several occasions: “The government will propose, we will discuss, you will vote,” raising the prospect of difficult debates on all elements of government policy.