France debt set for highest level since 1978 as fiscal strain grows
France is facing mounting pressure to rein in its public finances as it prepares a €54 billion package of spending cuts for next year.
France's national debt is on track to reach its highest level since 1978 in 2026, surpassing the EU's 60% of GDP limit, according to the country's finance ministry. The public debt is projected to reach 119.3% of GDP in 2026 and 121.7% in 2027, more than double the EU's reference limit. This unprecedented rise in debt is attributed to a high and persistent deficit.
France now ranks third among the most indebted countries in the eurozone, only behind Greece and Italy. Spain and Portugal have already surpassed the 100% and 90% of GDP debt thresholds, respectively. France's deficit, which stood at 5.1% of GDP last year, is expected to hit 5.4% this year, exceeding the EU's 3% limit. The government aims to trim its deficit to 5% in 2026, coinciding with presidential and parliamentary elections.
Prime Minister Sebastian Lecornu announced draft budget measures totaling €54 billion ($62bn) for 2027, with some sensitive cuts expected to be decided by parliament. The parliament's finance committee has criticized the budget cuts, arguing they would disproportionately affect the poorest. However, the head of France's fiscal watchdog, Amelie de Montchalin, maintains there is still time to correct the course, emphasizing that the crisis is not inevitable if swift and responsible decisions are made.
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