Sébastien Lecornu warns of the increase in French public debt before the presentation of the 2027 budget

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 and German government bonds reached a record 135 basis points. “When it starts like that, we don’t know how far it can go,” he worried.

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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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