France: PM Lecornu proposes €54 billion budget effort for 2027

French Prime Minister Sébastien Lecornu has announced a major fiscal effort for the 2027 budget, aiming for approximately €54 billion in savings to address rising public debt and economic pressures. Lecornu warned that without corrective measures, the national deficit could approach 6.5% of GDP.

Key components of the proposed budget include a freeze on non-defense state spending at 2026 levels. The government is also facing an additional €10 billion burden in debt servicing costs due to rising interest rates. To maintain fiscal stability, Lecornu proposed a revised surtax on large corporate profits, expected to yield €5 billion annually, while exempting intermediate enterprises to encourage investment.

The budget proposal faces significant political hurdles in a divided National Assembly. While the government seeks to reduce the deficit toward a 5% target, opposition groups like Nupes and the Rassemblement National present divergent demands regarding purchasing power and social protections. Additionally, political figures such as Bruno Retailleau are calling for the reinstatement of pension reforms to further reduce public spending.