France's Public Debt Tops €3.5 Trillion as Audit Court Warns of Alarmingly Fragile Finances

Overview

• After June 25 Insee data, France's Maastricht debt stood at €3,536.1 billion, or 117.5% of GDP, up €75.6 billion from the end of 2025.
• The Cour des comptes described the situation as 'alarmante' and projected debt could exceed €3,620 billion (about 118.5% of GDP) in 2026 while interest payments rise to roughly €77.4 billion this year and could reach about €100 billion by 2029.
• The government has kept a public target of a 5% deficit in 2026 and a below-3% deficit by 2029, has ruled out tax hikes for the 2027 budget, and has convened a Comité d'alerte while commissioning four economists to propose consolidation scenarios due in early July.
• Rising market yields, weaker growth forecasts and costs linked to the war in the Middle East increase the risk that higher debt-service costs will trigger a 'snowball' dynamic where interest payments further worsen deficits and limit spending options.
• The coming weeks will test choices between politically painful spending cuts or revenue measures, with immediate watchpoints being the Comité d'alerte, the economists' proposals, and short-term moves in French borrowing costs that could force quicker, tougher adjustments.