Overview
- The government has presented a draft 2027 budget that specifies €43 billion in savings to reduce the deficit and stabilize public finances.
- Planned cuts include about €5.5 billion in pension savings that exclude low pensions and €5.4 billion in reductions for local governments while some ministries face lower budgets and defense and justice receive increases.
- Revenue measures rely on higher VAT and income tax receipts, a stepped-up fight against tax fraud expected to raise about €1 billion, the removal of some tax breaks including support for renewables, and a smaller continued corporate levy with a possible sugar tax under discussion.
- France’s high debt load of roughly 120% of GDP and annual interest costs near €80 billion have pushed 10-year bond yields to levels not seen since 2002, adding urgent market pressure on the government to act.
- The draft moves to parliamentary debate in the autumn and faces immediate political risk after recent public-sector strikes and demonstrations, with opposition forces likely to press for no-confidence votes and further protests that could affect services and households.