On Tuesday, 15 April—two days after Minister of the Economy Éric Lombard—French Prime Minister François Bayrou warned against uncontrolled slippage in France’s public finances that could be recognised by the financial markets.
If drastic action is not taken, the increase in public debt, which reached 113% of GDP at the end of 2024, could lead to €100 billion in debt servicing in 2029, whereas it already stands at €65 billion in 2025, and could become “a dangerous trap—potentially irreversible”, warned Mr Bayrou, as quoted by AFP at the end of an alert committee on the budget that brought together political leaders and representatives from trade unions and social security bodies. In his opinion, France is not working enough and is spending too much in relation to its budget revenues.
Mr Lombard told BFM-TV on Sunday, 13 April, that the French government intends to save €40 billion next year—“essentially” in the form of cuts in budgetary expenditure. In his view, it is absolutely possible to reduce expenses while maintaining the quality of public services. Nonetheless, the minister did hope that the special contribution from the highest income earners, which sets a minimum tax rate of 20%, would be made permanent.
The ‘Bayrou’ government’s goal is to reduce the public deficit from 5.4% in 2025 to 4.6% next year in order to stay on track to return to a level of below 3% of GDP by 2029 (see EUROPE 13557/24). However, the subsequent slowdown in growth, which is expected to drop from 1.1% of GDP in 2024 to 0.7% of GDP in 2025, complicates the macroeconomic situation.
Mr Bayrou set four work guidelines for the 2026 budget, the key aspects of which will be presented at the beginning of July: mobilising an additional €3 billion for security and defence, refusing debt overhang, reforming public action, and supporting industrial and technological investment as well as administrative simplification.
Scheduled for this autumn, the adoption of the French budget for 2026 will be another test of how sound the ‘Bayrou’ government—which does not have a majority in the national parliament—is. The previous ‘Barnier’ government had failed due to its inability to get the National Assembly to adopt the 2025 budget. (Original version in French by Mathieu Bion)