France’s public debt is expected to reach its highest level in almost five decades as persistent budget deficits increase pressure on the government to reduce spending. The finance ministry says debt could rise to 119.3% of gross domestic product in 2026 and 121.7% in 2027, while ministers prepare a €54 billion package of budget adjustments.
The figures place France at the centre of Europe’s ongoing debate over fiscal discipline, economic growth and the future of EU budget rules. They also come ahead of France’s 2027 presidential and parliamentary elections, making politically sensitive spending decisions more difficult.
France’s debt burden continues to rise
A French finance ministry source said the increase in public debt was largely automatic, reflecting a deficit that remains high. The projected debt ratios would be more than twice the 60% of GDP reference value included in the European Union’s fiscal framework.
France’s debt level would also remain among the highest in the eurozone. Only Greece and Italy currently have higher public debt ratios, according to the information cited by the ministry. By contrast, Spain’s debt fell below 100% of GDP in July, while Portugal reduced its debt below 90% in 2025.
The scale of the increase means France’s public finances are becoming an important subject in European economic news, particularly because France is one of the eurozone’s largest economies. Changes in its borrowing needs can affect investor confidence, national spending plans and discussions about the future of EU economic governance.
Deficit remains above EU reference level
EU fiscal rules set a reference limit of 3% of GDP for a government’s annual deficit. France recorded a deficit of 5.1% of GDP last year, and the government expects it to reach 5.4% this year.
The forecast for 2027 is a reduction to 5%, but that would still be well above the EU reference value. France has been subject to enhanced monitoring under the EU’s excessive deficit procedure for the past two years because of its public-finance position.
The figures do not mean that France is facing an immediate loss of access to financial markets. They do, however, underline the challenge of bringing the deficit down while maintaining public services, supporting households and protecting economic activity.
What is the excessive deficit procedure?
The excessive deficit procedure is the EU framework used to monitor member states whose deficits or debt levels exceed the reference values. It is designed to encourage governments to present credible plans for correcting excessive deficits over time.
France’s position is therefore both a national budget issue and an EU policy matter. The French government must balance domestic political priorities with commitments made under European fiscal surveillance.
Government prepares €54 billion in adjustments
Prime Minister Sebastian Lecornu has outlined budget measures worth €54 billion for 2027. The package is intended to reduce pressure on the public finances, although some of its most politically sensitive elements have been left to Parliament.
One proposal would reduce tax advantages available to pensioners. The measure has already prompted opposition from the chair of Parliament’s finance committee, who argued that broad spending reductions could affect lower-income people most severely.
The timing is particularly significant. France will hold elections in 2027, and decisions on taxes, pensions and public services are likely to become major issues in the political debate. The government must therefore pursue savings while facing pressure not to impose measures that could damage household incomes or public support.
- The planned adjustments are valued at €54 billion.
- Some tax and spending measures still require parliamentary consideration.
- The government forecasts a deficit of 5% of GDP in 2027.
- France’s elections are scheduled for the same year as the proposed fiscal consolidation.
Independent watchdog assesses the budget plan
France’s draft 2027 budget measures have been submitted to the High Council of Public Finances, known as the HCFP. The independent fiscal watchdog is responsible for assessing the macroeconomic assumptions and overall credibility of the government’s projections.
Its assessment will provide important context before the budget proceeds through the political process. The review does not replace parliamentary approval, but it can influence how lawmakers, financial markets and European institutions judge the government’s plans.
HCFP president Amélie de Montchalin said the situation was not predetermined and that France still had time to change course. Her comments stressed that the risks could be managed if decisions were made quickly and responsibly.
Slower growth adds to the pressure
France’s fiscal challenge is being compounded by weaker economic conditions. The country’s growth forecast for 2026 has recently been revised down, with reduced consumer spending weighing on activity. Higher energy prices have added another complication for households and businesses.
Slower growth can make deficit reduction more difficult because tax revenues may rise less quickly, while demands for public support can increase. At the same time, spending cuts introduced too rapidly could place additional pressure on consumption and investment.
This creates a difficult policy balance for France: stabilising the debt trajectory without undermining an already fragile recovery. The outcome will matter beyond France because the country’s economic performance affects the wider eurozone and discussions about European competitiveness.
What happens next?
The HCFP’s assessment is the next important step for the draft budget. Parliament will then consider the proposed measures, including those involving tax relief and spending reductions. The final package could change during the legislative process.
France will also remain under EU fiscal monitoring. The government’s ability to demonstrate a credible path towards a lower deficit will be closely examined as European institutions apply the reformed framework for economic coordination.
For Ireland, the issue is mainly relevant through the eurozone and EU economic policy. France’s fiscal position does not directly change Irish taxes or public spending, but developments in one of the currency area’s largest economies can influence debates over interest rates, borrowing conditions and the interpretation of common fiscal rules.
Conclusion
France’s public debt is set to reach its highest level since 1978, reflecting deficits that remain far above the EU’s 3% reference value. The proposed €54 billion adjustment package shows the scale of the government’s response, but its final shape will depend on parliamentary decisions and the wider political context before the 2027 elections. The central test will be whether France can reduce its deficit while protecting economic activity and maintaining public confidence.
