France Targets 2027 Budget Calm Amid Rising Costs

France plans to cap public spending by 2027, emphasizing military and debt priorities. As defence and borrowing costs rise, non-defence budgets see minimal growth. Social security remains a concern as overall spending surpasses inflation. The government braces for budget debates before presidential elections potentially favoring the far right.

France is poised to tighten its public spending significantly by 2027, fueled by rising defense expenditures and borrowing costs, according to newly published spending ceilings. The move sets the stage for a heated parliamentary budget debate from October, as the administration strives to curb the deficit before the 2027 presidential elections, where forecasts show the far right gaining momentum.

The Finance Ministry has stated that next year’s state and governmental agency spending will total €708.4 billion ($812.2 billion), with directives to keep most departmental spending growth beneath the inflation rate. Projections indicate debt interest costs will elevate to €74.2 billion by 2027, up from €64.8 billion in the previous year, while defense spending aligns with the existing military programming law, increasing by €6.4 billion.

Besides defense, slight budgetary increases are allocated for environmental, educational, security, and justice sectors, while employment policy and development aid face cuts. The government also directs local authorities to shoulder part of the budgetary constraints before the draft bill's submission to parliament in early October. The most significant fiscal pressure remains social security, predicted to rise to €838.3 billion by 2027, continuing to outpace inflation.