France faces fiscal crisis as Prime Minister warns of rising debt

French Prime Minister Sébastien Lecornu has issued a warning regarding the nation's fiscal stability, citing rising borrowing costs on international markets and political uncertainty ahead of upcoming presidential elections. Lecornu noted that the fiscal deficit is projected to reach 5.4% in 2026, exceeding the initial 5% target, while public debt is expected to hit a historic high next year.

To address these challenges, the government plans to present a ‘recovery budget’ for 2027, which includes an estimated 54 billion euro effort in spending cuts. Labor Minister Jean-Pierre Farandou announced plans to nearly halve the Social Security deficit by 2027, aiming to save 5.5 billion euros by halting automatic inflation adjustments for pensions exceeding 1,260 euros.

The Prime Minister urged political forces to avoid adding instability to the current economic climate, stating that ‘more interest to be paid means fewer resources for the country’s priorities.’ Former Public Accounts Minister Amélie de Montsalen also emphasized the need for the political class to act to return public finances to a sustainable path.