Prime Minister François Bayrou has warned that France’s excessive debt puts it in danger, which is why he says his government’s proposed budget, which cuts into public spending and freezes pensions and other social payments, is crucial. But is the debt really such a danger? And how did France get to be so indebted?
France has not run a budget surplus in over fifty years. The last time was before the 1973 oil crisis.
"Since then, our deficit has not stopped increasing, and so our debt has not stopped increasing," François Ecalle, a former member of France’s high council on public finance and an honorary senior adviser to the Cour des Comptes public auditors, told RFI.
France’s debt at the end of the first semester of 2025 was €3,345 billion, according to the Insee statistics institute, and it has grown over the last two decades to reach 113.9 percent of GDP this year.
"Each year the public debt goes up because we have a deficit: overall, the state and local authorities and the social security system have revenue that is less than what they spend," Ecalle says.
Crises feed the debt
That deficit – the difference between revenue and spending – comes from yearly spending, but has also gone up with various crises, most recently the 2008 financial crisis and the Covid pandemic, when the government spent money to bail out businesses and support the healthcare system and other public services.
Like many states, France borrows money to cover the deficit, which costs more money, as there is interest to pay – the cost of servicing the debt.
Retirement benefits – which continue to rise, with an ageing population – are the largest item in the 2026 budget, but they are followed by the cost of servicing the debt, which Bayrou said is expected to cost €75 billion – more than the cost of healthcare or education.
Servicing the debt
Because interest rates have been on the rise, Bayrou said the cost of servicing the debt could become the single largest line item in the budget by 2029, which he says represents a serious and immediate danger.
"An immediate danger weighs on us, which we need to face, not tomorrow or after tomorrow, but today, without any sort of delay, without which our future will be denied us and the present will be made severely worse," the Prime Minister said during the press conference on 25 August in which he announced the confidence vote he would put to parliament on 8 September.
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The Cour des comptes public auditor agrees that reducing the debt is necessary. In July last year, the head of the institution, Pierre Moscovici, called it a "burning obligation".
Keeping France’s yearly deficit within the European Union’s limit of 3 percent of GDP is "imperative to the sustainability of the debt", the auditor wrote this July - if the deficit goes up, lenders will no longer trust France to pay back its loans.
Debate over how to reduce the debt
The debate - and subsequent vote in parliament - will focus on "the overall plan, its necessity and usefulness," Bayrou said, even as the political disagreements are more on the substance of Bayrou's particular proposals, rather than the concept of the deficit itself.
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"There is a growing consensus among experts, politicians, and the French people, particularly around the idea that something must be done to reduce deficits and regain control of the debt," said Ecalle.
"But there is no consensus on how to get there. And when one government starts saying how to do it, the response is to look elsewhere."
What to tax, what to cut?
Bayrou’s draft budget has €21 billion in spending cuts, plus a pension freeze and a cap to all social benefits to 2025 levels.
Taxation is a red herring - French President Emmanuel Macron’s governments have promised no new taxes on households.
Ecalle says at some point the government needs to find new sources of revenue, through taxes - on inherited property or high pensions - but he recognises the difficulty in getting people to support such measures: taxes, like budget cuts, are never popular.
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"The debates we are having today over how to balance the books - whether they involve spending cuts or tax increases - are debates that we have been having for decades. When I was at finance ministry 30 years ago, these were the same debates," he says, adding that his not optimistic that the current period will be any different.
"We put off these the conflicts over taxes and public spending that we are unable to resolve today, to some point in the future."
