“It’s not encouraging, but it’s reality,” warned Édouard Philippe on the TF1 set. “I fear two things”, explains the centrist candidate for the Élysée: “a long strangulation”, with “the debt which continues to increase”, and “the total absence of room for maneuver”.
Under these conditions, the situation could become dramatic in the event of an “external shock, which could cause a financial crisis” in the country. Some are already “speculating” on this scenario, he warned. “Our debt is increasingly bought by international players who say that, perhaps, France will default,” estimates Édouard Philippe.
On Wednesday, Prime Minister Sébastien Lecornu warned of the soaring interest rates on French debt, which are approaching 5%. “Reality is catching up with us,” he dramatized on the social network X. A way for the government to put pressure on the oppositions.
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To drastically reduce the Social Security deficit next year, the government is preparing to propose a de-indexation on inflation of certain pensions - above 1,260 euros - wider than anticipated.
While believing that the financial situation is “so bad” that any effort to save money is useful, the centrist candidate for the presidential election estimated, this Thursday morning on the set of TF1, that “in France, when you live on 1260 or 2000 euros, you can have difficulty making ends meet, of course”.
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Asked about the government's objective of making 54 billion savings in the 2027 budget, the Horizon candidate called for collectively creating more wealth rather than being content with end-of-the-line savings.
“As long as we don’t resolve the fundamental problems, we have to cut corners on little things,” he said this Thursday morning on the TF1 set. “Everyone who can must work a little longer,” he insisted, in order to “create additional wealth.”
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At the microphone of Radio France this Thursday morning, the president of Fip Eco estimated that France was in the process of “losing control of public debt, in the sense that it is increasing faster than economic activity”.
Yesterday, the yield difference (the spread) between French government bonds and those of Germany exceeded 120 basis points. “What is very worrying is that, for several days, the spread has been continuously increasing,” he notes. When it starts like that, you don’t know how far it can go.”
While France's 10-year borrowing rate has climbed to 4.86% and the debt burden is increasing year after year, should France adopt a budgetary "golden rule" to reassure investors? “It can be useful, provided you respect it,” decides the honorary senior advisor to the Court of Auditors.
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On the eve of the presentation of the draft budget, Sébastien Lecornu sounded the alarm on the state of the French economy. “Reality is catching up with us,” warned the Prime Minister on X, citing the rise in the cost of the debt. On Tuesday, the 10-year interest rates at which France refinances its debt on the markets exceeded the threshold of 4.8%, for the first time since the 2008 financial crisis, he stressed.
“Energy tensions are pushing rates up in many countries” and in France, “political uncertainty in the run-up to the presidential election adds to this pressure,” added the head of government, calling not to add “instability to these difficulties.” A form of appeal to oppositions to vote on the budgetary text that his government will present this Thursday. Otherwise, he implies, there is the risk of plunging France into a financial crisis.
Also read Record interest rate: “Reality is catching up with us”, warns Sébastien Lecornu before the presentation of the budget
This Thursday, the government will unveil its draft budget for 2027 in the Council of Ministers. Its exact content is, even today, a secret jealously guarded by Matignon. But from leads to parsimonious revelations, the contours of the finance bill - as well as the Social Security financing bill - paint a picture where "everyone" will be called upon to restore public finances. The amount of this “contribution” will reach 54 billion euros, Sébastien Lecornu has already promised in mid-September in an interview with Le Figaro.
The government will include in its text an “effort” of just under 6 billion euros for retirees, in particular via a partial deindexation of certain pensions. The executive has also planned a general cut in the spending of ministries. It is also preparing an increase in the taxation of motorway and airport operators, a freezing of the index point of civil servants and APLs, or even lower reimbursement of care and medicines by Health Insurance.
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