Fitch Downgrades France as Deficit Hits 107 Billion Euros
France's government deficit reached 107 billion euros by June 2026, prompting a credit rating downgrade by Fitch despite new tax measures.
The French Ministry of Finance reported that the central government's deficit reached approximately 107 billion euros by the end of June 2026. This figure is 14.4 percent higher than initial government projections. When accounting for gaps in municipalities, regions, and social security, the overall government deficit could climb to eight percent by the end of the year.
Sébastien Lecornu, the Prime Minister of France, implemented a tax package targeting high-income earners and companies with revenues exceeding one billion euros. This measure aims to generate approximately 9 billion euros in additional revenue to mitigate the debt spiral. The current fiscal crisis is driven by expenditures rising by 5.4 percent, which has outpaced a 3.7 percent increase in government revenues.
Despite these efforts, Fitch Ratings downgraded France's credit rating from AA− to A+. The agency cited political uncertainty and the absence of a sustainable path to stabilize public finances as the primary reasons for the downgrade.
