French Government Deficit Target 2029: 3% GDP Limit

The French Minister of Economy, Roland Lescure, considers that the surprise reduction of the French debt rating by S&P on Friday is a call to behave with “lucidity” and “seriousness”, and assures that his “absolute” objective is a trajectory for a deficit of less than 3% of GDP in 2029.

In an interview with the economic newspaper Les Echos released this Sunday, the eve of the start of the parliamentary debate on the budgets for 2026, Lescure insists that the guideline of the Prime Minister, Sébastien Lecornu, is that “whatever happens” the deficit next year must be “strictly less” than 5% of the gross domestic product (GDP).

The budget project presented by the Executive last Tuesday foresees a deficit of 4.7%, but since it does not have a parliamentary majority and has refused to adopt it by decree, since it was one of the demands of the socialists so as not to bring it down with a motion of censure, the final figure will depend on the debate in the coming weeks.

That is why the head of Economy and Finance points out that “it is now the collective responsibility of the Government and Parliament to achieve the adoption before the end of the year of a budget project that respects that trajectory” to reduce a deficit of 3% in 2029.

“I will be extremely cautious with everything that takes us away from this objective,” he stressed before indicating that he listens to what his European partners tell him and that “my absolute north, my north star is to go below 3% in 2029. We have to maintain a credible trajectory to achieve it.”

The socialists, who will continue to be crucial for Lecornu’s Government to survive, are against many of the adjustments contained in the draft budget and are betting on cutting the deficit by increasing taxes on the richest, in particular with the so-called ‘Zucman tax’ that would tax the assets of those who have more than 100 million euros at 2%.

On this issue, Lescure is careful to point out that his project already includes nearly 14 billion euros of new taxes, of which 6.5 billion euros for “the families with the highest tax contribution.”

And he charges against the ‘Zucman tax’ because it affects professional assets: “I do not in any case want French companies to be forced to sell their capital abroad to pay taxes.”

Lecornu had to make another concession to the socialists to maintain his Government, announcing the suspension of the pension reform that is progressively delaying the minimum retirement age from 62 to 64 years.