French PM vows to cut public spending by €54 billion to reduce deficit
Summary
France’s Prime Minister Sébastien Lecornu announced that the government will reduce public spending by €54 billion in 2027 to lower the country’s budget deficit. This effort aims to bring the deficit down despite rising fuel prices and social tensions ahead of the upcoming presidential election.Key Facts
- France plans to cut public spending by €54 billion ($62 billion) in 2027.
- The goal is to reduce the budget deficit to 4.8% of gross domestic product (GDP), excluding defense spending.
- Including military spending, the deficit target is 5%.
- France’s deficit was 5.1% of GDP last year but is expected to rise to 5.4% this year.
- The government denies these measures are austerity and aims to avoid social unrest like the previous yellow vest protests.
- Retirees will not face pension cuts, though cost-of-living increases for public workers will be paused.
- Income tax brackets will rise, increasing revenue, while some company taxes will be lowered.
- France’s debt is about 117.5% of GDP, and borrowing costs have increased to levels not seen since 2008.
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