The French Minister of Economy, Bruno Le Maire, announced that the government intends to save €54 billion in its 2027 budget to control the country's growing budget deficit. This cut comes as France has experienced minimal economic growth or even stagnation this year.
Need to Reduce Budget Deficit
Le Maire stated in an interview, part of which was published in the French newspaper Le Figaro, that without implementing cuts, the budget deficit would reach 6.5 percent of Gross Domestic Product (GDP). This would make it difficult for the government to keep its promise to the European Commission to reduce this figure to 3 percent by 2029.
Financial Challenges and Debt
The French Minister of Economy added, "These savings will significantly limit the growth of expenses, which are continuously increasing." He also pointed to the challenges posed by an aging population and rising health and retirement costs. France's debt has increased in recent years from €2.3 trillion to over €3.5 trillion, and the costs associated with it have become increasingly burdensome due to rising global interest rates.
Le Maire further emphasized that the country needs to find an additional €10 billion to finance its debts, stating, "The debt burden increasingly pressures the budget equation." The French government had previously planned to reduce the budget deficit to 4.7 percent of GDP this year, but last week concluded that this figure would exceed 5 percent.
The government has also revised its economic growth forecast for this year and next to 0.5 percent in 2026 and 1 percent in 2027. This comes as the government aimed to target €30 billion in the 2026 budget and €60 billion the year before.
The minority government of Le Maire will present its budget bill to lawmakers in the coming weeks, but its approval will be challenging without a governing majority, especially with the presidential elections approaching in spring 2027, which encourages parties to clarify their positions ahead of the election period.
