Mujtaba Rahman is the head of Eurasia Group’s Europe practice. He posts at @Mij_Europe. 2026 is here, and Europe is under siege. External pressure from Russia is mounting in Ukraine, China is undermining the EU’s industrial base, and the U.S. — now effectively threatening to annex the territory of a NATO ally — is undermining the EU’s multilateral rule book, which appears increasingly outdated in a far more transactional and less cooperative world. And none of this shows signs of slowing down. In fact, in the year ahead, the steady erosion of the norms Europe has come to rely on will only be compounded by the bloc’s weak leadership — especially in the so-called “E3” nations of Germany, France and the U.K. Looking forward, the greatest existential risks for Europe will flow from the transatlantic relationship. For the bloc’s leaders, keeping the U.S. invested in the war in Ukraine was the key goal for 2025. And the best possible outcome for 2026 will be a continuation of the ad-hoc diplomacy and transactionalism that has defined the last 12 months. However, if new threats emerge in this relationship — especially regarding Greenland — this balancing act may be impossible. The year also starts with no sign of any concessions from Russia when it comes to its ceasefire demands, or any willingness to accept the terms of the 20-point U.S.-EU-Ukraine plan. This is because Russian President Vladimir Putin is calculating that Ukraine’s military situation will further deteriorate, forcing Ukrainian President Volodymyr Zelenskyy to capitulate to territorial demands. I believe Putin is wrong — that backed by Europe, Zelenskyy will continue to resist U.S. pressure on territorial concessions, and instead, increasingly target Russian energy production and exports in addition to resisting along the frontline. Of course, this means Russian aerial attacks against Ukrainian cities and energy infrastructure will also increase in kind. Nonetheless, Europe’s growing military spending, purchase of U.S. weapons, financing for Kyiv and sanctions against Russia — which also target sources of energy revenue — could help maintain last year’s status quo. But this is perhaps the best case scenario. Activists protest outside Downing street against the recent policies of Donald Trump. | Guy Smallman/Getty Images Meanwhile, European leaders will be forced to publicly ignore Washington’s support for far-right parties, which was clearly spelled out in the new U.S. national security strategy, while privately doing all they can to counter any antiestablishment backlash at the polls. Specifically, the upcoming election in Hungary will be a bellwether for whether the MAGA movement can tip the balance for its ideological affiliates in Europe, as populist, euroskeptic Prime Minister Viktor Orbán is currently poised to lose for the first time in 15 years. Orbán, for his part, has been frantically campaigning to boost voter support, signaling that he and his inner circle actually view defeat as a possibility. His charismatic rival Péter Magyar, who shares his conservative-nationalist political origins but lacks any taint of corruption poses a real challenge, as does the country’s stagnating economy and rising prices. While traditional electoral strategies — financial giveaways, smear campaigns and war fearmongering — have so far proven ineffective for Orbán, a military spillover from Ukraine that directly affects Hungary could reignite voter fears and shift the dynamic. To top it all off, these challenges will be compounded by the E3’s weakness. The hollowing out of Europe’s political center has already been a decade in the making. But France, Germany and the U.K. each entered 2026 with weak, unpopular governments besieged by the populist right and left, as well as a U.S. administration rooting for their collapse. While none face scheduled general elections, all three risk paralysis at best and destabilization at worst. And at least one leader — namely, Britain’s Keir Starmer — could fall because of an internal party revolt. The year’s pivotal event in the U.K. will be the midterm elections in May. As it stands, the Labour Party faces the humiliation of coming third in the Welsh parliament, failing to oust the Scottish National Party in the Scottish parliament and losing seats to both the Greens and ReformUK in English local elections. Labour MPs already expect a formal challenge to Starmer as party leader, and his chances of surviving seem slight. France, meanwhile, entered 2026 without a budget for the second consecutive year. The good news for President Emmanuel Macron is that his Prime Minister Sébastien Lecornu’s minority government will probably achieve a budget deal targeting a modest deficit reduction by late February or March. And with the presidential election only 16 months away and local elections due to be held in March, the opposition’s appetite for a snap parliamentary election has abated. However, this is the best he can hope for, as a splintered National Assembly will sustain a mood of slow-motion crisis until the 2027 race. Finally, while Germany’s economy looks like it will slightly recover this year, it still won’t overcome its structural malaise. Largely consumed by ideological divisions, Chancellor Friedrich Merz’s government will struggle to implement far-reaching reforms. And with the five upcoming state elections expected to see increased vote shares for the far-right Alternative for Germany party, pressure on the government in Berlin will only mount A historic truth — one often forgotten in the quiet times — will reassert itself in 2026: that liberty, stability, prosperity and peace in Europe are always brittle. The holiday from history, provided by Pax Americana and exceptional post-World War II cooperation and integration, has officially come to an end. Moving forward, Europe’s relevance in the new global order will be defined by its response to Russia’s increased hybrid aggression, its influence on diplomacy regarding the Ukraine war and its ability to improve competitiveness, all while managing an increasingly ascendant far right and addressing the existential threats to its economy and security posed by Russia, China and the U.S. This is what will decide whether Europe can survive.

PARIS — French Budget Minister Amélie de Montchalin refused on Thursday to rule out using a controversial constitutional maneuver to pass a state budget for the year, despite her boss’ vow not to do so. France entered 2026 without a proper state budget after talks in parliament broke down in December, and the new year has brought little assurance that the government can put together a package that would pass France’s hung parliament. Given the impasse, some lawmakers have called on Prime Minister Sébastien Lecornu to employ the clause, Article 49.3 of the French constitution, to pass a proper state budget. De Montchalin was asked specifically about that possibility during an interview with radio station RTL, to which she replied: “I am not ruling out anything that could provide France with a budget.” Lawmakers last year voted to effectively roll over the 2025 budget into the new year to avoid a government shutdown, but that stopgap solution does nothing to bring down France’s massive budget deficit. Lecornu promised not to use the clause last year to ensure the immediate survival of his minority center-right government. But using the mechanism now would be risky, and not just because it might look like going back on his word. Employing it would dramatically raise the stakes of the debate, as lawmakers’ only remaining option to block the legislation would be to respond with a no confidence motion that, if successful, would leave France with neither a government nor a proper state budget. The center-left Socialist Party, a member of the opposition that has proven more willing to engage in talks than other parties, said it could refrain from backing a motion of no confidence even if the government were to use Article 49.3, provided the legislation forced through parliament included some of its policy requests.

Mujtaba Rahman is the head of Eurasia Group’s Europe practice. He posts at @Mij_Europe. It all looked rather bleak for France a little over a week ago, as President Emmanuel Macron’s former Prime Minister Edouard Philippe seemingly wrecked his successor’s deficit-cutting strategy. While Prime Minister Sébastien Lecornu was working toward a deal with the Socialists in his country’s fractured National Assembly, the 34 centrist lawmakers of Philippe’s Horizons party unceremoniously announced they would abstain or oppose the government in a key vote on the social security budget set to be held Tuesday evening. The eventual narrow win in favor of a relatively generous social security budget, covering pensions, health and welfare, is thus a godsend for Macron’s embattled prime minister — turns out, he may just survive. However, it doesn’t guarantee an agreement on the main state budget before the Dec. 23 deadline, and Lecornu will likely struggle to deliver another surprise victory over the next two weeks. Ahead of Tuesday evening’s final tally, the prime minister made a string of last-minute concessions to the Socialists and the Greens on health spending to get their votes or abstentions. And he eventually succeeded in securing a small majority by 247 to 234 votes. However, to keep next year’s welfare deficit below €20 billion — already up from the €17.5 billion originally proposed — Lecornu transferred an extra subsidy of at least €4.5 billion from the main budget, which covers everything from education to defense. And it remains unclear where exactly this money will be found, while still meeting the government’s promise to reduce France’s overall deficit from 5.4 percent of gross domestic product to “below 5 percent” next year. Still, Lecornu hopes his unlikely success with the social security budget in the National Assembly will create momentum for a deal on the main budget. Moreover, Tuesday’s victory — though limited and hard fought — is without precedent. No previous budget in France’s Fifth Republic has been negotiated and agreed on by an ad hoc coalition of government and opposition. So, as attention now turns to the main state budget, Lecornu’s balancing act will prove even trickier. | Julien De Rosa/AFP via Getty Images The problem is, the prime minister’s concessions to the moderate left — abolishing a planned freeze on pensions and welfare payments, boosting a 2 percent planned increase in health spending to 3 percent, and suspending pension reform — infuriated two of the four parties in his fragile centrist coalition. So, as attention now turns to the main state budget, Lecornu’s balancing act will prove even trickier. Upon its first reading in the National Assembly, this budget was rejected by 404 votes to one. And the French leader will be hard-pressed to find concessions for the moderate left, appease his coalition and keep his promise to reduce the deficit. As France’s third prime minister in the last 12 months, Lecornu has no majority in a National Assembly that’s currently split into 11 groups. In order to avoid a censure motion, he has also promised not to use his government’s special constitutional powers (Article 49.3) to impose legislation without a parliamentary vote, and has so far rejected pressure from within his own camp to reverse that decision. Simply put, using this power and facing censure is not a risk Lecornu is likely to take — especially since he wouldn’t resign if he lost the upcoming budget vote. He would instead argue the rejected budget deal was an attempted compromise and not his responsibility alone. Paradoxically, part of Lecornu’s problem is that he’s now expected to survive. Previously, the center, center right and Socialists agreed to abstain from voting, as they feared a government collapse and snap parliamentary elections in January, right before the important municipal elections in March. But now that this fear has subsided, Philippe and the center right can take the risk of wrecking the budget deal. To that end, Lecornu and his government are now preparing emergency legislation to roll over this year’s budget to keep the French state operational, and lawmakers have been warned they may be called in for a special session to pass such a stopgap budget in late December. According to the ministry of finance, though, if a rolled-over 2025 budget were to last throughout next year, it would push France’s deficit beyond 6 percent of GDP. In fact, even a delay of two or three months could, in theory, significantly weaken efforts to reduce the budget deficit, as under French law, authorities can’t retroactively apply any tax increases that lawmakers eventually approve. Still, it would at least allow Lecornu to hang on and fight another day. But the outlook for France is looking no brighter than before.

PARIS — Foreign pensioners who dream of spending their retirement under the sun in the French Riviera might have to reconsider their plans if their free health care gets axed. France wants non-European Union pensioners who are currently benefitting from the public health care system to start paying for it. It’s a move that would particularly affect American retirees, who have flocked to one of Europe’s most generous welfare states not only for its food, scenery and culture, but also, in some cases, for its world-class free health care. “It is a matter of fairness,” François Gernigon, the lawmaker who put forward the proposal, told POLITICO. “If you are a French citizen and you move to the U.S., you don’t have reciprocity, you don’t benefit from free social security.” Under French law, non-working citizens from outside the EU who have a long-stay visa and can prove they have sufficient pension or capital revenue (more than €23,000 annually) as well as private health care insurance can, after three months, obtain a carte vitale, which gives them free access to public health care. At that point, they can annul their previous private health insurance and benefit from the French one. It’s become a popular choice for U.S. retirees in recent years. But a majority of French lawmakers wants to put an end to that situation and make them pay a minimum contribution. France wants non-European Union pensioners who are currently benefitting from the public health care system to start paying for it. | Stephane de Sakutin/AFP via Getty Images That idea already passed in two branches of the parliament this month during budgetary discussions, and could see the light as soon as next year as the government has also backed it. Gernigon said that even U.S. expats have told him they don’t find the current situation normal and that they are ready to contribute more. Under the latest version of the proposal, as modified by the French Senate, only non-EU citizens who are not paying taxes or contributing to other welfare programs in France would be required to pay the new minimum contribution. Lawmakers have not fixed the contribution amount as it will be up to the government to do it later. For Gernigon, the value could vary depending on the level of health care coverage, but it would still be cheaper than private insurance in the U.S. or abroad which, he said, costs around €300 to €500 per month. The debate comes as France struggles to cut spending and bring down its budget deficit to 5 percent of gross domestic product next year. Gernigon said he had not yet evaluated how much revenue these new contributions would raise, but acknowledged that his main goal is fairness rather than fixing France’s budget problems. “This is not what is going to fill the hole in the social security budget,” he said.

PARIS — There was a time when Alain Minc would sing the praises of French President Emmanuel Macron, comparing him to Napoleon’s generals: an extraordinary being blessed both with talent and luck. Fast-forward eight years and Minc, Macron’s former mentor and an influential political adviser, now says he’s the “worst” president since France’s Fifth Republic was founded in 1958. Minc says the president’s narcissism has driven him to make reckless decisions that “imperiled French institutions” and boosted the far right ahead of the 2027 presidential election. “Macron is leaving the country in a much worse state that when he took the reins of power,” Minc said in an interview with POLITICO. “He will leave a political landscape that is perhaps permanently unstable in France. It’s unforgivable.” Minc, an influential businessman who has advised multiple French presidents dating back to François Mitterrand in the 1980s, was one of Macron’s earliest backers. The 76-year-old advised Macron, whose office declined to comment for this story, before his 2017 victory and during his first term, which Minc said wasn’t too bad. But their relationship slowly deteriorated as Macron made what Minc he believes were a series of missteps and surrounded himself with “an incredibly mediocre team.” The two stopped speaking shortly after the president called for an ill-advised snap election last year. Today, Minc is perhaps most scathing of the growing number of former Macron allies-turned-critics. Minc’s critiques are much more personal than those of, say, Gabriel Attal and Edouard Philippe, two former prime ministers who spoke out against Macron last month at the height of France’s recent political crisis. Minc says Macron’s spiraling mistakes since his reelection in 2022 are rooted in narcissism, as the president believes — per Minc — that he is smart and cunning enough to solve any problem thrown his way. “Macron is in denial of reality … He is crushed by his own psychology,” said Minc. Others who know Macron have compared him to an inveterate gambler who is always convinced he’s just a win away from taking down the house, no matter how many losses came before. “He thinks as usual that he is the only one who will conjure up a magic trick to find a way out of the difficulties,” said Minc. According to Minc, Macron does not recognize that he is “the problem” and that to resolve the political turmoil in France, he needs to withdraw from domestic politics and pivot to international affairs. Macron has, in fact, been more focused on foreign affairs after losing his parliamentary majority last year. But his refusal to give up control over domestic politics was put on full display last month when he reappointed Prime Minister Sébastien Lecornu to lead the government just days after the premier had handed in his resignation. Alain Minc, 76, advised Macron before his 2017 victory and during his first term. | Lionel Bonaventure/AFP via Getty Images MACRON’S LEGACY French voters appear just as unhappy as Minc with Macron’s second term, even if they don’t share the septuagenarian’s diagnosis of the president. A poll last week found that Macron had tied his predecessor François Hollande for the crown of least popular president in the last 50 years in the aftermath of the political crisis sparked by Lecornu’s resignation. But there may be more circles of hell to discover for a president once so formidable the international press likened him to Louis XIV, the Sun King. Macron’s explosion onto the scene with a new centrist movement that destroyed France’s old two-party system fundamentally changed French politics. But Minc argues that in the wake of the 2024 dissolution that ended with a hung parliament, the French president is exacerbating “a splintering of the political landscape.” Minc says Macron is neglecting his own centrist family and, despite calling for more coalition building, is refusing to make concessions to build the type of alliances with other mainstream opposition parties. In Minc’s view, the only party that has a legitimate shot at winning the 2027 presidential election and then emerging with a parliamentary majority in the legislative contest that follows is Marine Le Pen’s far-right National Rally. “That would be terrifying prospect” and “dishonoring” for Macron, Minc added. A recent Elabe opinion poll put the National Rally leaders miles ahead of more moderate leaders, with Le Pen getting 34 percent of the vote, compared with 15.5 percent for Philippe, Macron’s first prime minister, and 12.5 for Attal, the former premier who now leads Macron’s political party. Minc worries the French haven’t fully grasped what “a fundamental change” it is to switch from a liberal democracy to an illiberal one, he said. “They think: If they fail, we’ll just kick them out,” he said. But U.S. President Donald Trump’s return to the White House and Prime Minister Donald Tusk’s struggles to restore the rule of law in Poland show the dangers of flirting with illiberalism. “The return ticket doesn’t come cheap,” he said.

PARIS — France’s National Assembly is expected to miss a deadline to vote on the first part of the country’s 2026 budget. Lawmakers from the lower chamber of France’s parliament were due to vote Tuesday on the part of the budget that deals with raising revenue. But they are unlikely to have enough time to work through the more than 2,400 amendments that still need to be discussed and voted on. “We will not have time to vote on the revenue side of the budget on Tuesday,” Philippe Juvin, the top lawmaker in charge of the budget at the National Assembly, said in an interview with broadcaster LCI on Sunday. Two government officials, both of whom were granted anonymity as they were not authorized to speak to the press, confirmed the delay to POLITICO. The delay is likely to raise doubts about whether lawmakers can stick to the tight schedule needed to pass a budget. Legislative work must be wrapped up shortly before Christmas so any bills passed have the requisite time to be reviewed by the constitutional court before being enacted by President Emmanuel Macron. If no vote takes place on Tuesday, the National Assembly will pause debating the revenue part of the text until November 13. They will then have 10 more days to wrap up discussions before the text goes to the Senate. In the meantime, they will start discussing the social security budget, a distinct piece of legislation which covers pension and health care spending. Last week, the National Assembly passed amendments that raised corporate taxes to the government’s dismay, but it failed to adopt a new wealth tax inspired by economist Gabriel Zucman, which was one of the key demands made by the Socialist Party.

PARIS — France’s National Assembly on Thursday adopted a text put forward by Marine Le Pen’s National Rally for the first time in history, raising questions about the risk of normalizing the far-right party. In an eye-opening session, 185 lawmakers voted in favor of a nonbinding resolution that urges the government to repeal a 1968 agreement with Algiers that facilitates Algerian immigration to France. A total of 184 lawmakers, mainly from the left, voted against. The resolution pushed by the National Rally passed by the narrow margin thanks to the decisive support of some right-wing and centrist lawmakers, but also due to many from President Emmanuel Macron’s party not showing up for the vote, for unclear reasons. Even if the text has no legal effect, the vote marks a major symbolic victory for Le Pen’s party, which has so far been isolated by centrist and left-wing lawmakers due to the so-called cordon sanitaire, a self-imposed unwritten rule preventing them from working with the far right. “For the first time, a text presented by the National Rally […] has been adopted,” Le Pen said shortly after the vote, as she again urged Prime Minister Sébastien Lecornu to repeal the accord. The National Rally managed to gain the unprecedented victory by picking a battle in which it garners support beyond the party’s ranks. The text was also backed by 17 lawmakers of Horizons, the center-right party of former prime minister Edouard Philippe. In the past, even the head of Macron’s party, Renaissance, Gabriel Attal, called for repealing the agreement, amid increasing tensions between France and Algeria. But Attal was absent during Thursday’s vote and only 30 out of 92 EPR lawmakers voted against the text. Left-wing opposition groups were quick to attack Attal and his party, accusing them of allowing Le Pen’s party to pass a text they consider racist — while also letting the National Rally score the symbolic win.

PARIS — Emmanuel Macron is now France’s least-popular president in the past 40 years, according to a new poll published Thursday. The Verian Group survey, which polled 1,000 people and was published in the conservative daily Le Figaro, shows Macron’s approval rating at a staggering 11 percent — tying the lowest figure ever recorded by the firm. The previous record-holder was Macron’s direct predecessor and former boss, François Hollande, who hit 11 percent in late 2016, shortly before announcing that he would not seek a second presidential term. By Verian’s measure, Macron and Hollande now share the crown of France’s least popular president since 1981, when the pollster and its predecessors began conducting this monthly survey for Le Figaro. Other polling institutes have reached similar conclusions about Macron’s slump following his unpopular decision to raise the retirement age and the months of political deadlock triggered by his decision to dissolve parliament following a far-right triumph in the 2024 European election. An Ipsos poll released earlier this month put Macron’s approval rating at 19 percent — above that firm’s lowest-ever figure for Hollande, at 13 percent in 2014. And an Odoxa survey published Tuesday found that just 20 percent of respondents consider Macron a “good president” — again placing the 47-year-old only marginally ahead of his predecessor. “Macron is constantly hooked on polls — he’d need to be blind or deaf not to realize that he’s disliked,” a former presidential adviser, who was granted anonymity to speak candidly, told POLITICO. The president has, the adviser said, “a poor understanding of the consequences that the reforms he believes to be necessary can have on the state of the country.” The recent ire toward French heads of state appears to be a historical anomaly, at least recently. Studies on approval ratings show the first three elected presidents of France’s Fifth Republic, which was founded in 1958, consistently polling at higher levels. While Macron’s numbers are particularly bad, Europeans’ pessimism over their leadership appears to be on the up. U.K. Prime Ministers Keir Starmer’s approval rating lies slightly below 20 percent, according to POLITICO’s Poll of Polls aggregator, while German Chancellor Friedrich Merz recently hit a low of 25 percent, according to a Forsa Institute poll for RTL and ntv released on Tuesday. PRESIDENT EMMANUEL MACRON APPROVAL RATING All 3 Years 2 Years 1 Year 6 Months Smooth Kalman For more polling data from across Europe visit POLITICO Poll of Polls.

Mujtaba Rahman is the head of Eurasia Group’s Europe practice. He tweets at @Mij_Europe. When French President Emmanuel Macron reappointed his ally and confidante Sébastien Lecornu as prime minister, he was widely accused of being obstinate and out of touch. Coming just four days after Lecornu’s resignation, the decision turned out to be a prelude to the most humiliating U-turn of Macron’s eight years in the Elysée Palace. On Tuesday, Oct. 14, Lecornu announced he’d suspend the only significant domestic reform of the president’s second term — the gradual increase in France’s official retirement age from 62 to 64. A costly concession that will increase French social spending by €2 billion over two years, it was demanded by the Socialist swing group in the country’s National Assembly as their price for allowing Lecornu’s survival, so that he can negotiate a deficit-cutting budget. The prime minister’s concessions didn’t stop there. He also promised the Socialists he’d moderate the pain of deficit cuts next year, and that he’d allow the much-splintered assembly and senate to negotiate the final details of the 2026 budget without using the government’s power to impose its choices under Article 49.3 of the constitution. But by offering to set aside his guillotine powers, Lecornu has bought time at the expense of infinite complication. Despite his huge giveaways, Lecornu barely survived two no-confidence votes, which were supported by the far right and part of the left, by only 18 votes. Sixty-nine Socialists, with 7 exceptions, stood aside, warning they’d shift their pivotal weight to bring down the government unless its draft 2026 budget was reshaped to their liking — take that as code for fewer spending cuts and big tax increases on big business and the wealthy. This isn’t where the bad news ends for Lecornu: During the first two days of negotiations in the National Assembly’s finance committee, an unholy alliance of left and far right added another €9 billion to next year’s deficit. The amendments — numbering more than 1,500 in total — also included a radical reversal of the government’s plan to freeze income tax bands next year. So, for the moment, France seems likely to avoid the threat of a snap parliamentary election, which could bring the far-right National Rally party to power. But the budget crisis remains far from resolved. Without the government’s magic wand to shorten debate, each line of the budget — actually two budgets, both government and social security — will now be the object of intense haggling between the governing center, a divided left and a bloody-minded far right. The 2026 budget draft sent to the assembly follows the broad lines drawn up by Lecornu’s predecessor, François Bayrou — though the new prime minister describes it is a “point of departure.” And if they can agree on anything, the two houses of parliament will have the final word. National Rally is anti-tax and pro high social spending — save on immigrants. Whereas center-right leader Bruno Retailleau, who has been increasingly hostile after leaving the government earlier this month, has called on his deputies to reject the budget outright unless all tax rises are kept to a minimum. Meanwhile, the Socialists will have a hard time swallowing the proposed spending cuts in the budget draft. Bruno Retailleau has called on his deputies to reject the budget outright unless all tax rises are kept to a minimum. | Christophe Petit Tesson/EPA No doubt the left will also try to revive the so-called Zucman tax — a 2 percent annual levy on all fortunes above €100 million. And while the government may tactically agree to some increases in taxes on the wealthy next year, it will face fierce opposition on the matter from the center right and even its own centrist camp. There is, however, room for compromise. Lecornu has conceded in advance that the deficit target for 2026 can be softened to “below 5 percent of GDP” instead of the 4.7 percent in the draft budget. This means any budget that emerges is likely to disappoint France’s creditors, the rating agencies and the European Commission. And without Article 49.3, the result will likely be a “Frankenstein budget” with little fiscal logic — or no budget at all. Still, Lecornu has another constitutional weapon, or threat, on his side. If no opinion is given by parliament within 70 days, or in 50 days for the social security budget, the government has the right under the constitution’s Article 47 to impose a version of its original budget by decree. This outcome has never been used before — and Lecornu would almost certainly be censured and toppled if it were to happen.Yet, some veteran parliamentary insiders are regarding it as increasingly likely, which suggests France’s political and fiscal crisis is far from over.

PARIS — Rating agency Moody’s on Friday maintained its credit rating on France but revised its outlook to “negative” from “stable” as the beleaguered government of Prime Minister Sébastien Lecornu struggles to push through his budget. Moody’s decision not to lower France’s rating will be a relief for the government after downgrades by the other two big ratings agencies — S&P and Fitch — in recent weeks. Moody’s kept its long-term sovereign rating on France at Aa3, but cited political instability and the resulting difficulties in taming the government’s budget deficit in lowering its outlook to negative. The negative outlook means the rating agency’s next update likely could be a downgrade. Friday’s decision “reflects the increased risk that the fragmentation of the country’s political landscape will continue to impair the functioning of France’s legislative institutions,” Moody’s said in a statement. “This political instability risks hampering the government’s ability to address key policy challenges such as an elevated fiscal deficit, rising debt burden and durable increase in borrowing costs,” the agency said. French Finance Minister Roland Lescure said in a statement that Moody’s decision showed “the absolute need to build a common path toward a budget compromise.” He added that the administration “remains determined” to meet the deficit target of a 5.4 percent of GDP this year and to get the budget shortfall below 3 percent of GDP by 2029. In an interview with POLITICO shortly before the decision was published, Moody’s Chief Credit Officer Atsi Sheth said that putting some order in France’s public finances was increasingly “challenging” because of the inability of French parties to find compromises. The French parliament’s lower house, the National Assembly, earlier this week started discussing the €30 billion budget squeeze proposed by the government for next year. In yet another concession to win the Socialists’ support, Lecornu promised not to use a constitutional backdoor that would have allowed him to bypass a vote in parliament to pass the budget and ignore most parliamentary amendments. But that leaves his budget draft vulnerable to dilution during the parliamentary process and to the risk that deficit cuts will be smaller than expected.