Overview
- The government has submitted a 2027 budget draft that centres on €43,000 million of corrective measures designed to bring the public deficit down to about 5% of GDP in 2027.
- The plan places heavy weight on spending restraint, using a broad freeze on benefits, a suspension of civil‑service pay rises and cuts to student and housing aid, with roughly 60% of the adjustment coming from spending reductions.
- Revenue measures include raising compulsory contributions toward a 44.2% tax‑to‑GDP ratio, harmonising sick‑leave and severance taxes, reducing the 10% pension deduction (estimated €3.4bn), a tax on ultraprocessed foods (€300m) and recovering €1bn from tax fraud.
- Officials say the package responds to sharply higher borrowing costs — France’s 10‑year yield has risen toward the high‑single digits in recent months — and to inflation near 3% driven largely by energy price shocks tied to the Iran conflict and Strait of Hormuz disruptions, with the stated aim of reassuring Brussels and investors.
- Passage in the fragmented National Assembly is far from certain as opposition figures have called for the government to adopt the budget by decree or may present counter‑budgets, and proposed cuts to pensions and aid have raised social sensitivity and the risk of public protests.