France's Debt Dilemma: A Looming Crisis

France faces a growing public debt crisis, with substantial risks expected in 2026 and beyond. The Cour des Comptes highlights the government's fragile fiscal outlook and the urgent need for a credible strategy to reduce the deficit and generate primary surpluses to restore market confidence.

France is grappling with a ballooning public debt crisis, as reported by the Cour des Comptes on Thursday. The audit office foresees mounting risks by 2026, with current fiscal strategies deemed inadequate to combat weaker growth and heightened geopolitical tensions.

The debt is projected to soar by over €160 billion in 2026, surpassing €3.6 trillion, while interest payments could reach €77.4 billion due to increased borrowing costs. Senior auditor Carine Camby underscores the urgency, warning that excessive debt constrains the country's fiscal flexibility.

With a presidential election looming, the effectiveness of proposed measures, largely reliant on tax hikes, is uncertain. The government must present a viable long-term plan to reduce the deficit below 3% of GDP by 2029 to regain market trust, Camby asserts.