Overview
- The finance ministry's monthly report published August 4 shows the central State recorded a €106.8 billion deficit for the first half of 2026, up €6.4 billion from the same period in 2025.
- Debt interest payments jumped from about €29.2 billion to €34.5 billion over six months, adding roughly €5.3 billion to spending and accounting for most of the semestrial deterioration.
- Budget receipts rose 2.8% (€5.2 billion) led by higher VAT and income tax, but total State spending grew 5.6% as defence outlays and a 23% rise in the EU contribution added pressure.
- Ministers including Roland Lescure and Prime Minister Sébastien Lecornu have said the government’s aim to limit the deficit to 5% of GDP this year now looks hard to reach.
- Higher market interest rates tied to global inflationary pressure and geopolitical shocks are crowding out investment, with only about €13 billion allocated to investment so far and fiscal choices for 2027 narrowed.