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2026-07-16 08:14:14
[Warning: Deteriorating French Public Finances: Deficit and Debt Rise, Heavy Interest Burden, Reforms Urgent] (1) An independent report commissioned by the French government indicates that without corrective measures, the budget deficit will rise from 5.0% of GDP in 2026 to nearly 7% in 2030, while the public debt ratio will climb from 118% to over 130%, posing a significant risk of deterioration in public finances. (2) As bonds issued during the low-interest-rate period are gradually refinanced at higher interest rates, debt servicing costs are increasing, with annual interest payments expected to rise from €78 billion this year to €124 billion in 2030, further exacerbating the fiscal burden. (3) The report estimates that to stabilize the debt ratio during the next presidential term, a total of €126 billion in austerity measures will be needed by 2032; if action is postponed until after the 2027 election, the adjustment will be even greater, potentially shaking investor confidence. The report recommends targeted structural reforms and a re-examination of the inflation-linked mechanism for welfare and pensions.
