France Has a €44 Billion Budget Plan. Whether It Can Actually Deliver Is Another Question Entirely.
The French government under Prime Minister Sébastien Lecornu entered 2026 with a budget package containing €44 billion in fiscal measures, equivalent to approximately 1.5% of GDP. The plan targets a public deficit of no more than 5.1% of GDP this year, a modest improvement from 5.4% in 2025 but still the highest deficit in the eurozone and well above the EU's 3% threshold. By 2029, the government has committed to bringing the deficit below 3%, a target that most independent analysts consider optimistic given the current political landscape.
The mechanics of the €44 billion are a combination of new taxes, spending freezes, and structural reforms. A nominal freeze on social benefits including pensions, an extension of an exceptional contribution by large enterprises, a top-up tax on high revenues, and an increase in the Generalized Social Contribution on financial revenues together form the revenue-raising side. On the expenditure side, the government has frozen real spending growth across ministries while carving out exceptions for military and healthcare.
The pension reform complicates everything. The 2023 reform raising the retirement age from 62 to 64 was supposed to anchor medium-term fiscal savings. It has been suspended until January 2028, costing an estimated €300 million in 2026 and removing a key pillar of the longer-term deficit reduction plan. The suspension was necessary to secure enough parliamentary support to pass the budget at all, given the minority position of Lecornu's government.
Political fragmentation is the fundamental obstacle. France has had three governments fall since 2024 following Macron's decision to dissolve the National Assembly. The current parliamentary arithmetic requires constant negotiation with opposition parties whose fiscal preferences conflict directly with the consolidation plan. Scope Ratings has noted that the lack of a parliamentary majority raises real uncertainty about whether the savings plan will survive the legislative process intact.
The IMF's projection of France's debt-to-GDP ratio rising toward 130% by 2030 under current policies represents one of the more stark sovereign debt trajectories among advanced economies. The country's credit rating has already been downgraded by multiple agencies. For a founding member of the eurozone and the bloc's second-largest economy, France's fiscal trajectory has moved from a peripheral concern to a central question for European financial stability.
