France’s PM Sébastien Lecornu Proposes €54 Billion Budget Cut for 2027

A Major Financial Correction to Curb Spending

The proposed adjustment represents roughly 1.8 points of GDP. Lecornu’s figure marks a significant escalation from the 30 milliards d’euros previously discussed. By comparison, last year, François Bayrou proposed an adjustment of 44 milliards d’euros before being renversé by a motion of censure.

“Le projet de loi de finances que je propose contiendra un effort budgétaire d’environ 54 milliards d’euros, dans la stabilité fiscale. C’est un redressement important ; ces économies serviront à refroidir considérablement le moteur des dépenses qui augmentent inexorablement chaque année,” Lecornu stated to Le Figaro.

Drivers of Public Expenditure and Debt Pressures

The Prime Minister pointed to multiple structural pressures driving up public spending. An aging population is placing heavy strain on social accounts, with Social Security expenditures projected to climb by 22 milliards d’euros without corrective interventions. Geopolitical shifts are also pushing interest rates upward, forcing the state to find an additional 10 milliards d’euros to service the national debt. Furthermore, operational spending by local authorities shows a spontaneous increase of 7 milliards d’euros that requires strict curbing.

“Au total, si ce budget ne contenait aucune mesure d’économies, le déficit 2027 tutoierait les 6,5 % du PIB,” Lecornu warned, noting that early efforts to slow health insurance spending over the summer have begun to structurally mitigate the shock.

Deteriorating Economic Forecasts and Political Stakes

The budget rollout arrives amid a deteriorating economic backdrop. The French government lowered its 2026 growth forecast for the third time, reducing it to 0.5% against 0.7% in July and 1% initially due to domestic and international uncertainties, alongside rising fuel prices driven by conflict in the Middle East. Simultaneously, the Banque de France revised its 2026 GDP growth projection down to 0.4% against an estimation of 0.5%, citing sluggish household consumption and constrained business investment.

Lecornu convened a government seminar on Thursday to outline the budget framework ahead of a difficult legislative battle. The Prime Minister must transmit the draft budget to the Haut Conseil des finances publiques to secure an evaluation of the macroeconomic framework. Parliament faces intense pressure under the threat of censure motions, with the 2027 presidential election looming over the debate.