France, 2027 budget under the weight of debt

The French National Assembly opened debate on 13 October on the revenue section of the 2027 budget, in a fiscal context that lawmakers describe as difficult. The starting picture is heavy: France closed 2025 with a budget deficit of 5.1% and public debt equal to 115.6% of gross domestic product, two figures that place the country under pressure to consolidate public finances just as the measure for the following year is being discussed.

The bond market is registering this tension in real time. The spread between French government bonds, the Oats, and German Bunds continues to widen, a signal that financial observers read as growing caution among investors regarding Paris’s ability to keep its debt under control in the coming years. The parliamentary debate on the revenue side — the ways in which the State intends to finance public spending — is thus intertwined with a market judgment that is forming day by day on sovereign bonds.

The combination of a high deficit, debt above 115% of GDP and a rising spread forms a picture that concerns not only France itself, but the entire eurozone, where government bond yields of the various member states move in relation to one another. A lasting widening of the Oat-Bund spread tends in fact to be viewed as an indicator of overall confidence in European sovereign debts, not only in the French one.

The debate on the revenue of the 2027 budget, opened in mid-October, continues in the following weeks at the National Assembly, in a parliamentary calendar that will have to grapple with the need to find a balance between fiscal consolidation and the stability of the governing majority. The figure accompanying this passage remains the one published for 2025: deficit at 5.1%, debt at 115.6% of GDP.