Sebastien Lecornu Announces €54 Billion Savings Drive for 2027 Budget

Prime Minister Sebastien Lecornu announced a €54 billion savings drive for the 2027 budget to prevent the national fiscal deficit from spiraling. The plan aims to reduce the deficit to 5% of economic output in 2027, after the government missed its 2026 target and projections suggested the deficit could exceed 6.5% of GDP without intervention. The measures focus on containing social and local government spending, cutting cost-of-living adjustments for public sector workers, and managing rising borrowing costs.

The proposal comes as France faces severe economic pressure. Public debt is projected to reach 121.7% of GDP by 2027, double the European Union's 60% reference limit. Market tension has pushed the spread between French and German ten-year bonds to an 18-year high, while global oil prices exceeding $100 per barrel have fueled strikes by police, power sector workers, and fishermen.

Political instability complicates the budget's passage. Marine Le Pen, leader of the National Rally and a frontrunner for the upcoming presidential election, indicated a strong likelihood of voting against the budget, specifically opposing freezes on pension increases. While Lecornu stated that no pensions will be reduced, he deferred sensitive decisions regarding tax breaks for pensioners to parliament to avoid the fate of previous prime ministers who were toppled over budget disputes. Socialist lawmakers have already ruled out support for the plan.