French Prime Minister Sébastien Lecornu has proposed a €54 billion spending cut plan in the 2027 budget to lower the fiscal deficit to 5% of GDP, down from an expected 5.4% in 2026. The announcement comes amid intense pressure from soaring government bond yields and public anger over high fuel prices, which triggered port blockades by fishermen. With a presidential election scheduled for spring 2027, Lecornu's minority government faces a steep parliamentary battle as left-wing and far-right opposition parties threaten to reject the budget.
€54 billion spending cuts plan
- ▪French Prime Minister Sébastien Lecornu announced a plan to cut public spending by €54 billion ($62 billion) in the 2027 budget to control the country's deficit.
- ▪Under Prime Minister Sébastien Lecornu's 2027 budget proposal, French public sector workers will not receive cost-of-living adjustments, and many benefit levels will not be frozen
- ▪The French government plans to let income tax rate thresholds rise to increase revenue, while dropping taxes on some companies by excluding them from an additional levy on larger businesses in France's 2027 budget
- ▪The French government's 2027 budget plan excludes reducing state pensions, though Prime Minister Sébastien Lecornu stated the pace of future pension increases will be debated in parliament.
- ▪French Prime Minister Sébastien Lecornu stated that without France's proposed €54 billion in cost-saving measures, France's 2027 budget deficit would exceed 6.5% of GDP
Deficit reduction to 5% GDP
- ▪French Finance Minister Roland Lescure acknowledged that fallout from the Middle East crisis contributed to the government missing its 2026 fiscal deficit target of 5% of GDP.
- ▪The French government previously targeted a 2026 deficit of 5% of GDP, but a slump in economic growth and rising interest costs pushed the expected 2026 deficit to 5.4%.
- ▪The French 2027 budget bill aims to reduce the fiscal deficit to 5% of gross domestic product, down from an estimated 5.4% in 2026.
Fuel price protests blockades
- ▪French fishermen agreed to lift their port blockades on September 17, 2026, after six hours of talks with Junior Fisheries Minister Catherine Chabaud.
- ▪French Prime Minister Sébastien Lecornu extended emergency fuel subsidies on September 16, 2026, until the end of the year for the agriculture, fishing, and construction sectors.
- ▪French fishermen blocked access to Mediterranean ports and the Frontignan oil depot on September 17, 2026, to protest high fuel prices and deteriorating working conditions.
2027 presidential election timing
- ▪National Rally leader Marine Le Pen, a frontrunner for the 2027 presidential election, threatened to vote against the 2027 budget if it included plans to not raise pensions in line with inflation
- ▪The French government is finalising its 2027 budget amid rising voter restlessness over the cost of living and ahead of a two-round presidential election scheduled for April and May 2027.
- ▪Socialist lawmakers in France ruled out supporting the 2027 budget, leaving the minority government potentially reliant on the National Rally party to pass the 2027 budget
Rising French borrowing costs
- ▪Yields on French government bonds have soared to their highest levels since the 2008 global financial crisis, raising the cost of financing France's public debt.
- ▪France's public debt has grown to more than €3.5 trillion, representing 117.5% of its gross domestic product, a debt-to-GDP ratio last seen during World War II.
- ▪Prime Minister Sébastien Lecornu stated that France must find an additional €10 billion in the budget solely to finance its rising debt service costs.
Debatable claims
- ▪France's proposed €54 billion budget cut is necessary to stabilize its economy
- ▪France should increase state pensions in line with inflation
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