PARIS, Dec 15 (Reuters) - French senators approved a 2026 budget bill on Monday that the government said would worsen the fiscal deficit by more than it had planned, setting the stage for high-stakes negotiations between both houses of parliament at the end of the week.
The conservative-dominated Senate voted 187 to 109 in favour after reworking the bill, which the deeply divided National Assembly, the lower house, failed to pass last month after rejecting its tax provisions.
After the Senate vote, an indicator of the level of political support for the budget, a joint committee of seven lawmakers from both houses will meet on Friday to hammer out a new version of the bill for a vote in the lower house due on December 23.
That vote could give the budget final approval.
Prime Minister Sebastien Lecornu's government wants to limit the public sector budget deficit to less than 5% of economic output next year, down from an estimated 5.4% this year - the biggest in the euro zone.
Finance Minister Roland Lescure said the Senate's amended version of the budget left it with a deficit of 5.3%, and urged lawmakers to hammer out a lower compromise in the coming days.
"A deficit of 5.3% won't work, you are going to have to make concessions," Lescure said in the Senate after the vote. "I'm convinced we can do it, but everybody is going to have to make an effort."
Should lawmakers fail to agree on a new version, the government will likely submit emergency stopgap legislation to ensure it can keep spending, collecting taxes and borrowing on a temporary basis in the new year until a proper budget can be passed.
Lecornu's minority government has little room to manoeuvre in France's fractious parliament, where budget battles have already toppled three governments since President Emmanuel Macron lost his majority in a 2024 snap election.
Last week the house narrowly passed the social security budget, which included provisions to suspend a deeply unpopular 2023 pension reform in a key concession to Socialist lawmakers, whose backing Lecornu needs to pass legislation. A final, formal vote is due on Tuesday.
(Reporting by Leigh Thomas and Inti Landauro; Editing by Aidan Lewis and Jan Harvey)
