Foreign Policy > France

France Doubles Down on Taxes

France is reducing its enormous budget deficit in the current fiscal year. However, the price for this minimal relief is high: only massive tax hikes can still slow the debt spiral.

Thomas Kolbe | April 14, 2026

France is reducing its enormous budget deficit in the current fiscal year. However, the price for this minimal relief is high: only massive tax hikes can still slow the debt spiral.

On both sides of the Franco-German border, the same problem persists: overburdened and reform-averse politicians struggle against a rapidly accelerating debt spiral. Their preferred tool: higher levies.

Last week, France’s Finance Minister Roland Lescure reported a revision of the projected budget deficit for the current year.

Initial estimates for 2026 had suggested a deficit well above five percent. Yet numerous fiscal measures brought last year’s deficit down to 5.1%. For 2026, the Finance Ministry expects it to stabilize at around five percent -- provided the ongoing energy crisis and the war in Iran do not cast a lasting shadow over the year, and the economy does not abruptly collapse.

With total public debt at roughly 115% of GDP, France cannot possibly meet the Maastricht criteria under this level of new borrowing.

Do restrictive fiscal rules, such as the increasingly fading Maastricht criteria, even matter anymore in the Eurozone? It’s a rhetorical question: public spending dynamics are no longer controllable. One could also say: EU nations have entered a phase of fiscal fatalism.

After a 4% increase in government spending in 2024, outlays rose again last year, this time by 2.5%.........

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