French Government Announces Extra €3 bn Savings Amid Deficit Risk

France’s finance ministry warned that the target to reduce the public deficit to 5 % of GDP in 2026 is now difficult to achieve. The government trimmed its growth forecast for 2026 to 0.7 % from an earlier 0.9 %, citing a weak start to the year and external shocks such as the war in Iran.

To narrow the fiscal gap, ministers Roland Lescure (Finance) and David Amiel (Public Accounts) announced an additional €3 billion of savings for the state and the Social Security system. The new cuts add to €6 billion of austerity measures already taken in April, bringing total announced savings to €9 billion (or €11 billion if €2 billion of "risks" for local authorities are counted). The €3 billion package comprises €2 billion for the state—largely linked to aid measures introduced since April—and €1 billion for Social Security.

A separate component of the fiscal tightening targets the work‑accident and occupational disease branch of Social Security. The government has set a mandate to achieve €800 million of savings there, either by raising employer contributions or by capping indemnities at 1.8 times the minimum wage. Trade unions warn that such cuts would shift the financial burden onto injured workers.

These measures are intended to keep public finances on a sustainable path and reassure markets and European institutions amid rising debt concerns.