By Michel Rose and Ingrid Melander
PARIS (Reuters) -French Prime Minister Sebastien Lecornu on Friday outlined a wealth tax among proposals aimed at winning leftist support for a 2026 budget, which the Socialists immediately called "insufficient" without closing the door on further talks.
In talks with Socialist Party leaders, Lecornu proposed a tax on financial wealth to break an impasse on next year's budget. That tax would not apply to business owners' professional assets, two sources close to the prime minister told Reuters.
Earlier in the day, Lecornu ruled out using the so-called article 49.3 constitutional powers to ram the budget through parliament without a vote, a move which the Socialists and the far-right National Rally (RN) welcomed but said was not enough.
"He presented us with a (budget) proposal that was very insufficient and, in many respects, alarming in substance — even though he clarified that, by committing not to use article 49.3 anymore, the draft could be amended by parliament," Socialist Party chief Olivier Faure said after the meeting, adding that he was now waiting to hear if Lecornu would go further.
French bond yields rose slightly after Faure's remarks.
Parliament is divided into three blocs, none of which has a majority, and Lecornu depends on rival parties to pass legislation - and for his own survival as prime minister.
LECORNU SEEKS TO EMPOWER PARLIAMENT
Last month, Lecornu became President Emmanuel Macron's fifth prime minister in two years after parliament ousted his predecessor, Francois Bayrou, over his plans for a 44 billion euro budget squeeze next year.
Lecornu's move to rule out using the constitution's article 49.3 clause is seen as a way to hand power back to parliament amid fraught budget talks.
The clause, which allows prime ministers to ram bills through without a vote, has been criticised as undemocratic, but Lecornu's predecessors have often used it to pass complex legislation.
"In a functioning parliament — one that's been recently renewed and reflects the face of France — you can't just force things through," Lecornu said, in his first televised address since being named by Macron three weeks ago.
A GOOD STEP, BUT NOT ENOUGH, OPPOSITION SAYS
National Rally leader Marine Le Pen welcomed Lecornu's decision on the 49.3 procedure, saying it showed respect for parliament's powers, but added that her party still needed to hear about his policy plans.
Either Lecornu breaks away from Macron's policy or he will be voted out, Le Pen said after meeting him.
Socialist leader Faure said his party wanted to know if Lecornu was willing to meet its key demands, such as a vote in parliament to change pension reforms that were adopted thanks to that procedure.
"We don't just want procedural steps, we want the French people's lives to change," Faure said.
(Reporting by Michel Rose; Additional reporting by Leigh Thomas, Makini Brice, Inti Landauro, Alessandro Parodi, Elizabeth Pineau and Richard Lough; Writing by Ingrid Melander and Michel Rose; Editing by Tomasz Janowski, Gabriel Stargardter and Alex Richardson)
