Key facts
- France plans a €54 billion savings drive for its 2027 budget.
- Prime Minister Sebastien Lecornu announced the savings drive to rein in spending and control the fiscal deficit.
- The government will extend targeted fuel aid until the end of the year.
- Fishermen's fuel subsidy will increase from 25 to 35 centimes per liter.
- Construction companies will receive 20 centimes per liter of non-road diesel.
- Farmers will continue to receive a subsidy of 15 centimes per liter.
France's government plans to implement a €54 billion savings drive in its 2027 budget to curb a spiraling fiscal deficit, Prime Minister Sebastien Lecornu announced. The measures come as the government faces mounting pressure from protests over the rising cost of living and high energy prices, exacerbated by the impact of the Iran war.
Lecornu stated that the savings are necessary to control social and local government spending, as well as rising borrowing costs. Without these measures, the 2027 deficit would exceed 6.5% of GDP. Finance Minister Roland Lescure acknowledged that the government would miss its fiscal deficit target of 5% of GDP this year due to fallout from the Middle East crisis.
In response to ongoing protests, the government extended targeted fuel aid until the end of the year. Fishermen will see their subsidy increase from 25 to 35 centimes per liter, while eligible construction and public works companies will receive 20 centimes per liter of non-road diesel. Farmers will continue to receive a 15 centimes per liter subsidy.
Opposition parties, including the Socialists, have ruled out supporting the budget, potentially leaving its fate to the RN party led by Marine Le Pen. Le Pen indicated her party would likely vote against the budget if it includes plans to not raise pensions in line with inflation, though she did not rule out abstaining.
Fishermen in southern France had blocked port access to protest high energy prices, but agreed to lift blockades after talks with the government. Gérard Corrodano, a fishermen's representative, described the situation as "strangling" for the sector.