French PM to propose €54B budget squeeze for 2027
Sébastien Lecornu said the deficit would soar to 6.5% without any cost-cutting.
The French Prime Minister, Sébastien Lecornu, intends to propose a €54 billion budget reduction for 2027 as part of efforts to curb the nation's expanding deficit amid minimal economic growth this year. Speaking to French daily Le Figaro, Lecornu expressed concern over the budget deficit soaring to 6.5% of GDP without any cuts, making it difficult for the government to fulfill its pledge to the European Commission to reduce the figure to 3% of GDP by 2029.
These financial measures will help control the increasing spending, which has been steadily rising due to an aging population and the associated health and old-age-related expenses. Over the past few years, France has faced difficulties in controlling spending and its debt burden, which has risen from €2.3 trillion to more than €3.5 trillion and is becoming more expensive to service with the spike in global interest rates.
Lecornu, who strongly opposes any tax hikes, stated that additional €10 billion is required to finance the debt. The country's debt burden is now significantly impacting the budget equation. The government had initially planned to reduce the deficit to 4.7% of GDP this year, but it now anticipates the figure to exceed 5%. They also revised their growth forecasts, with expectations for 2026 and 2027 being 0.5% and 1% respectively.
The minority government of Lecornu will submit its budget bill to lawmakers in the coming weeks. However, passing the bill may prove challenging without a governing majority and as the spring 2027 presidential election approaches, encouraging parties to declare their positions prior to the electoral cycle.
Written by urgent.news from Politico EU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
