France Faces Budget Crunch as Debt Costs Rise

France’s rising public debt servicing costs will require serious budget negotiations in parliament, government spokeswoman Maud Bregeon said. The government is seeking to reduce the deficit without placing too great a burden on the public.

Yields on 10-year French government bonds exceeded 4.13% last week, reaching their highest level since 2008. “All of this will clearly require a great deal of discipline”, Bregeon said. She reiterated that the government wants to improve France’s public finances and reduce the deficit without raising taxes on the French people.

Finance Minister Roland Lescure said on Monday that the government would do everything it could to keep the budget deficit as close as possible to 5%.

Meanwhile, the European Commission forecasts that France’s budget deficit will reach 5.1% of GDP in 2026, above the 3% ceiling set by EU rules.

The government therefore faces potentially difficult budget negotiations ahead of the 2027 presidential election, with polls currently putting Marine Le Pen's Rassemblement National well ahead.

(Reuters, bak)