French lawmakers reject pension tax cuts as national budget review begins

As the French parliament began its review of the national budget, lawmakers swiftly rejected a government proposal to lower the ceiling on the 10 percent pension tax allowance.

The rejection of the measure straight out of the blocks sets the stage for a rocky ride in parliament for the minority government trying to push through its €43 billion ($48 billion) savings packages.

Cross-party opposition members heavily criticized the plan, arguing that fiscal consolidation should not be balanced on the backs of retirees.

Protecting pensioner purchasing power remains a major political priority, as older demographics turn out at high rates ahead of upcoming electoral cycles.

With pensions representing France's single largest public expenditure at over 400 billion euros, the initial pushback signals a challenging legislative road ahead for the government's broader savings package.

With France at the centre of a global bond market selloff over its weak public finances, Prime Minister Sebastien Lecornu is seeking to cut the budget deficit from 5.4% of economic output this year to 5% next year.