French PM Lecornu Calls Debt Level 'Concerning,' Prioritizes Deficit Reduction Ahead of 2027 Budget

French Prime Minister Sébastien Lecornu, in a July 2026 interview with Paris Match, described France's debt and deficit levels as 'worrying, even serious,' limiting the country's freedom of action. He affirmed that deficit reduction remains the top priority, despite a challenging pre-election context and lack of a parliamentary majority. The government forecasts a deficit of 5% of GDP in 2026, down from 5.1% in 2025, but Lecornu said he is 'not very optimistic' about meeting targets for 2026 and 2027, citing the unforeseen impact of the war in Iran on energy prices and military costs. He advocated for fiscal stability with no new taxes, though he left open the possibility of trimming certain tax niches. On spending, he proposed reducing reimbursement for medications with low therapeutic benefit, preserving hospital rates, and introducing a 'budgetary bonus-malus' to encourage ministries to invest in digital technology and AI. He also suggested greening the VAT compensation fund for local authorities and redistributing a 'demographic dividend' in education due to falling birth rates. Lecornu stressed the need to adopt a budget during the winter to avoid hindering the next president elected in May 2027.