French Budget Endgame Means Stress Test for Stocks and Bonds

Investors who have endured 18 months of underperformance in French stocks and bonds are about to get another dose of political gamesmanship that threatens to worsen matters.

Prime Minister Sebastien Lecornu is racing to push the 2026 budget through a fragmented Parliament by year’s end in a bid to stabilize France’s finances. He won an important battle Friday when the National Assembly backed a compromise deal on one slice of the budget, but he’s still far from an approved spending blueprint. A vote on the social security chapter of the budget is due Tuesday and the broader financial plan later this month.