Key facts
- France's public debt is growing rapidly, posing a risk to market confidence.
- The deficit target of 5.0% of GDP for this year is not guaranteed.
- Debt is expected to reach 118.5% of GDP by 2026.
- Interest payments on debt are projected to reach €77.4 billion in 2026.
- Fiscal plans depend on tax increases with uncertain spending cuts.
- A multi-year strategy is needed to reduce the deficit below 3% of GDP by 2029.
France is facing a severe and escalating public debt crisis that threatens its financial stability and market confidence, according to a stark warning from the nation's public audit office, the Cour des Comptes. The office stated that the country is "suffocating under debt," a reality that constrains its finances and policy choices.
The fiscal outlook for the current year is precarious, with the government's target of reducing the deficit to 5.0% of GDP deemed "far from guaranteed" due to weaker economic growth and increased geopolitical and inflation risks. The debt is projected to surge by over €160 billion in 2026, surpassing €3.6 trillion, which equates to approximately 118.5% of the country's GDP.
Compounding the issue, borrowing costs are expected to accelerate this deterioration. Interest payments alone are forecast to climb to around €77.4 billion in 2026, driven by higher rates on new debt, potentially outpacing other spending containment efforts. Senior auditor Carine Camby emphasized that this excessive debt is not a future risk but a present reality, limiting France's financial flexibility and policy options.
Camby also highlighted that the upcoming presidential election in April complicates the urgent need for action. The audit office criticized the government's current fiscal plans, which lean heavily on tax increases while offering limited and uncertain spending restraint. Key savings measures, particularly in social and state spending, lack detailed documentation, raising doubts about their efficacy.
Since President Emmanuel Macron lost his parliamentary majority in a 2024 legislative election, successive minority governments have struggled to pass budgets and reduce the fiscal deficit. The Cour des Comptes urged the government to present a clear, credible multi-year strategy aimed at bringing the deficit below 3% of GDP by 2029 and achieving sustained primary surpluses long-term. Failure to do so, Camby warned, leaves France "at the mercy of the markets."