By Elizabeth Pineau and Makini Brice
PARIS (Reuters) – French caretaker Prime Minister Sebastien Lecornu said on Wednesday a deal could eventually be reached on a 2026 budget despite the country’s political crisis, striking a cautiously optimistic tone as he held talks with various parties.
Lecornu, France’s fifth prime minister in two years, tendered his and his government’s resignation on Monday, just hours after announcing the cabinet line-up, making it the shortest-lived administration in modern France.
But at President Emmanuel Macron’s request, Lecornu is now holding last-ditch consultations with key political party leaders in an effort to defuse France’s worst political crisis in decades and avoid snap parliamentary elections.
LECORNU SAYS BUDGET COULD BE AGREED BY YEAR-END
“There is a willingness to have a budget for France before December 31 of this year,” Lecornu told reporters on Wednesday, speaking after talks on Tuesday with conservatives and centre-right parties and before meeting the Socialist Party and Greens.
“And this willingness creates momentum and convergence, obviously, which reduces the prospects of dissolution (of parliament),” he said.
Lecornu said he hoped a deal could be reached on bringing France’s budget deficit down to between 4.7% and 5%, from a target of 5.4% in 2025.
Markets have taken fright at the political paralysis in the euro zone’s second biggest economy, with investors already jittery over the country’s yawning budget deficit.
However, French assets staged a modest improvement on Wednesday after Lecornu’s cautiously optimistic comments, with Paris’ CAC 40 index up 0.86% from the open and the yield on France’s 10-year bond down some five basis points at 3.52%.
Lecornu, a Macron loyalist, said he would meet the president later on Wednesday, as planned, to discuss the results of his meetings with party leaders and see whether a deal was possible.
Lecornu was also set to be interviewed on French TV about 8 p.m. (1800 GMT).
It was unclear when Macron, who is under heavy pressure from opposition parties to call snap parliamentary elections or resign, would announce any decisions. Many options are possible, including an extension of the consultations with the parties.
LE PEN SAYS NO
Far-right leader Marine Le Pen, who refused to take part in this round of talks with Lecornu, made clear on Wednesday she would not be part of any deal.
“I’ll censure everything. Enough now — the joke has gone on long enough,” she told reporters, reiterating her demand for snap parliamentary elections.
After meeting with Lecornu, Socialist Party chief Olivier Faure said he wanted to help find a way out of the crisis but that the left wanted to run the next government.
The Socialists want a 2% wealth tax on France’s richest 0.01% in the 2026 budget, making Lecornu’s political survival contingent on a measure that has strong public support but alienates conservatives.
SOCIALISTS, GREENS, WANT A LEFTWING PM
They also want France to row back on an unpopular reform that will make people work longer to qualify for a pension. Faure said Lecornu had given him no guarantees on the pension demand.
Acting education minister Elisabeth Borne said she was open to suspending the pension reform she herself steered through parliament in 2023, but others, including acting finance minister Roland Lescure, warned against such a costly move.
Greens leader Marine Tondelier, whose party is allied with the Socialists, said after her talks with Lecornu on Wednesday that France had “never been closer” to having a new left-wing prime minister.
“Appointing yet again a prime minister from the president’s (centrist) camp would be a final provocation, they wouldn’t last a minute,” she told reporters.
(Reporting by Elizabeth Pineau, Inti Landauro, Makini Brice, Sudip Kar-Gupta; additional reporting by Amanda Cooper, Alun John; Writing by Ingrid Melander; Editing by Gareth Jones)
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