France Unveils Major Fiscal Plan to Cut Budget Deficit
The proposed measures are part of a broader effort to strengthen public finances and curb the growth of government debt. According to the draft, the government expects to combine the new measures with fiscal consolidation actions introduced in 2026 and earlier years.
Once those existing measures are included, the total fiscal effort planned for 2027 is expected to reach €54 billion ($60.9 billion).
The budget projections anticipate increased revenues from value-added and personal income taxes, while receipts from companies are expected to decline. The government also expects an extension of the tax targeting high-income households to generate approximately €600 million ($677 million) in additional revenue next year.
As part of its spending reduction plans, the Economy and Finance Ministry expects the number of state employees to fall by around 1,076 full-time equivalent positions in 2027. The figure excludes an anticipated expansion of personnel in the defense sector.
The government is also proposing changes to renewable energy support programs, with the aim of making public financing more efficient. The plan includes ending what the government describes as "excessive remuneration" under some of the oldest renewable energy support schemes.
Social spending is another area targeted by the proposed measures. The draft Social Security financing bill calls for family benefits to remain at their current level throughout 2027 rather than increasing.
"The amount of family benefits will be maintained in 2027 at its current level," the document said.
The freeze is expected to generate savings of approximately €500 million ($564 million). The government also plans to reduce spending on the back-to-school allowance by €600 million.
Another measure included in the draft budget would introduce a tax on suppliers of aviation kerosene. The revenue would be used to support the development of sustainable aviation fuel projects as France seeks to expand financing for lower-emission aviation technologies.
The government is also targeting the Social Security deficit, which it aims to reduce from €21.8 billion ($24.6 billion) in 2026 to €12.7 billion ($14.3 billion) in 2027. Officials expect most of the improvement to come from measures designed to limit spending.
Personal housing assistance is also expected to face a budget freeze, with the government proposing to keep 2027 funding at the 2026 level. Officials are additionally considering changes to housing benefits and tax advantages available to students from higher-income families.
The proposed budget comes as France faces mounting pressure from its expanding public debt. Recent figures put the country’s total debt at €3.596 trillion ($4.06 trillion), equivalent to around 119% of GDP.
The debt level represents one of the highest points in France’s modern history, with the country reportedly reaching a comparable level only in the period following the Second World War.
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