French finance minister announces additional €40 billion ‘effort’ in 2026 #FrenchFinance

There is no question of allowing the idea that France could once again delay reducing its public deficit to take hold. As Prime Minister François Bayrou’s government prepares to submit its medium-term structural plan to the European Commission, outlining the budgetary trajectory for the coming years, the country will have to make “an additional effort of €40 billion” in 2026. This is a “very considerable” commitment, announced Economy Minister Eric Lombard on Sunday, April 13.

France had already set aside a budget for 2025 which included some €50 billion in savings; this was increased this week by an additional €5 billion drawn from reserve funds.

The “additional effort” for 2026 will be done “essentially” in the form of savings, Lombard said on French television, but “it can also be an increase in revenue linked to growth.” “With 57% of gross domestic product [GDP] in public spending, we can absolutely both reduce expenses and maintain the quality of services,” he said, refusing to label this policy as “austerity.”

This new tightening goes against the speech Lombard gave on April 4, in which he warned that if growth were to plummet due to the trade war, the government would not further cut spending or raise taxes. This would mean it would not meet its target of reducing the public deficit to 4.6% of GDP by 2026.

‘A difficult equation’

Lombard also said on Sunday he wished to make a temporary tax on the wealthy, applied in 2025, into a permanent levy out of “a concern for equity.” He estimated that this measure “would affect a few tens of thousands of taxpayers.” Lombard’s office specified on Sunday afternoon that “this contribution, the form of which is currently being discussed and worked on, should in no way penalize work or investment in our economy. It is about finding a fair and sustainable solution to a phenomenon of ‘over-optimization’ that, while not illegal, breaks the fairness of taxation.”

The spokesperson for the government, Sophie Primas, admitted on Sunday that it was “a difficult equation.” However, “the prime minister has committed, as has the president of the republic, (…) not to increase taxes,” she said, speaking on French radio.

Lombard and Primas made these remarks two days before a major conference called by Prime Minister Bayrou, intended to raise awareness among the French about the country’s budgetary “pathologies.” Its significant fragility is exacerbated by uncertainties linked to the protectionist assault from Donald Trump’s United States.

Reacting to Lombard’s announcement, radical-left leader Jean-Luc Mélenchon said that “the people of France are being treated like Greece in 2010,” a reference to the austerity measures implemented in that country during the financial crisis, which later affected the entire eurozone. President Emmanuel Macron’s camp “presents you with the bill (…). The equivalent of the national education budget,” wrote the leader of La France Insoumise party on X.