40 billion euros. This is the amount of equally expected for the government to stop the sliding of public finances. Although Prime Minister François Bayrou will present on Tuesday, July 15, the details of his budget recovery plan on Tuesday, July 15, it is a sure bet that efforts will prioritize health expenses … For the benefit of the defense, Emmanuel Macron has promised an increase in the budget allocated to the order of 6.5 billion euros in two years.
It should be said that the signals are red. According to the latest figures published by Insee on June 26, the public debt in the direction of Maastricht increased by 40.2 billion euros in the first quarter of 2025 and reached 3,345.4 billion euros. Therefore, it is 113.9% of the Gross Domestic Product (GDP), which makes France the third most indebted country in the euro zone behind Italy (135.3% in the fourth quarter of 2024) and Greece (153.6%).
The public deficit is expanding at 169.6 billion euros, or 5.8% of GDP in 2024, and should remain around 6% this year. If, in spite of everything, from the Covvi-19 health crisis it has been improved since it had dangerously about 9% in a France under Campana in 2020, it is still too far from the famous 3% led by public authorities by 2029. Only two European countries are worse in terms of deficit: Romania and Poland.
“The average is 3.2% and our obligations are 3%,” he insisted on the senior official who fears the public debt beyond 120% in three or four years. Try, if necessary, that the budgetary situation of France is worrying: “Our Greek friends anticipate France below in 2030”.
Handling charges
How to explain such drift? Also according to INSEE, in 2024, public administration spending increased by 3.9%, after previous increases of 3.7% in 2023 and 3.9% in 2022.
“From 1975 to 2024, the PC public spending report increased by 11 points. Its increase was particularly strong (8 points) from 1975 to 1985. Since 1985, it has been in a more moderate tendency (3 points),” analyzes François Ecalle, in a note published in its “Fipeco” site, dedicated to public finances and the economy.
Above all, of the 11 points of increase in public spending as a percentage of GDP during the last fifty years, “social benefits explain 8.4,” said the specialist.
The reduction of public spending, therefore, tense political debates. In another more published report on July 2, the Court of Auditors Press, public authorities to make “very demanding efforts” to control public spending. In February, the wise men of Rue Cambon have already put, and again, on guard the government against a “free” public spending. “Today, the first risk is the loss of control of our public finances,” warned Pierre Moscovici on July 10. “I don’t know how we do good public policies if we don’t have good public finances,” he added.
The French prefer to save
One of the problems identified by economists is the one that faces spending, income is not enough.
“What characterized us was the power of consumption. And we see that the government’s policy of borrowing massively to redistribute not encourages to consume. This money is saved. The house savings rate reaches a high level of 19%.” He stressed Anne-Sophie Alsif, chef from Bdo France’s economy, during the public expenses of July 10.
“All the countries of the euro zone have experienced the same crises as us, Covid crisis, energy crisis, when we are the only ones to identify so many deficit. The State, as well as to give space for homes. During the Covid, we have already seen that the French preferred to save,” Stéphanie Villiers, PWC economic advisor completed.
White year, freezing pension pensions, less paid work stoppages or less reimbursed medications … There are many savings in savings, although inappropriate, to correct public finances. “The participation is that in the three or four years, our entire public spending does not increase by 60 billion Eyris but 20 billion euros per year,” said Public Accounts Amélie de Montchalin on July 10.
Source: BFM TV
