France's Debt Is Heading Toward 130% of GDP by 2030. The Pension Reform That Was Meant to Fix It Has Just Been Suspended.
France entered 2026 with a fiscal situation that most eurozone governments would find alarming. The budget deficit reached 5.8% of GDP in 2024, the highest in the entire euro area. For 2026, the European Commission projects the deficit will remain at 5.1% of GDP. The IMF predicts France's debt-to-GDP ratio will rise from approximately 116% in 2025 toward nearly 130% by 2030, diverging from the consolidation paths being managed by most other eurozone members.
The debt servicing cost tells the story most clearly. The French Treasury expects interest payments to surge to €59.3 billion in 2026, up from €36.2 billion in 2020. In six years, the cost of carrying France's debt has grown by more than €23 billion annually. That money is not available for healthcare, education, or infrastructure.
The pension reform that President Macron pushed through in 2023, which raised the retirement age from 62 to 64, was supposed to be part of the answer. It was intensely unpopular and triggered months of street protests. The current government under Prime Minister Sébastien Lecornu suspended the reform until January 2028 as a political concession to secure socialist support for the budget. That suspension costs an estimated €300 million in 2026, with larger costs accumulating as the retirement age remains lower for longer.
The European Commission's Spring 2026 forecast projects France's GDP to grow modestly as inflation eases and financing conditions improve, but flags that weak fiscal consolidation and persistent legislative deadlock are now structural features of the country's economic outlook. The credit rating agency KBRA downgraded France's long-term sovereign rating to AA in late 2025, citing persistently high deficits and a deteriorating debt trajectory.
The Bank of France governor Francois Villeroy de Galhau has warned that allowing the deficit to exceed 4.8% risks pushing France into what he described as gradual fiscal suffocation. The political environment makes improvement difficult. With no parliamentary majority and three governments having fallen since 2024, France's ability to implement sustained spending restraint is genuinely in question.
