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France Targets €40 Billion in Spending Cuts for 2026 Budget

Prime Minister François Bayrou rules out tax hikes, emphasizing reduced public spending and increased domestic production to address mounting debt concerns.

Le premier ministre François Bayrou, aux côtés de ses ministres, lors de la conférence sur la situation des finances publiques, à Paris, le 15 avril.
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Le président de la Cour des comptes et du Haut conseil des finances publiques, Pierre Moscovici, le 8 avril.

Overview

  • The French government has announced a €40 billion spending reduction as part of its 2026 budget plan, aiming to lower the public deficit without increasing taxes.
  • Prime Minister François Bayrou highlighted insufficient domestic production and low employment rates as key contributors to France's fiscal challenges.
  • Public debt, currently at 113% of GDP, is projected to reach €100 billion annually by 2029, posing risks to national financial stability and sovereignty.
  • Key budget priorities include bolstering defense spending, reforming public sector operations, and revitalizing economic activity through reindustrialization.
  • The government is considering adopting the 'Budget Base Zero' (BBZ) method, a private-sector-inspired approach, to identify additional savings and streamline expenditures.