{"id":268661,"date":"2025-07-17T06:53:12","date_gmt":"2025-07-17T06:53:12","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/268661\/"},"modified":"2025-07-17T06:53:12","modified_gmt":"2025-07-17T06:53:12","slug":"frances-budget-crisis-wont-be-solved-by-rearmament","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/268661\/","title":{"rendered":"France\u2019s budget crisis won\u2019t be solved by rearmament"},"content":{"rendered":"

Bastille Day usually makes international headlines for its fantastically choreographed military parade. This year, however, it also provided President Emmanuel Macron with the opportunity to announce a serious policy shift. To keep France \u201cfree\u201d in a world of predators, his government is going to spend<\/a> an extra \u20ac10 billion on defence over the next two years, starting with an extra \u20ac3.5 billion next year.<\/p>\n

It\u2019s been a long time coming. Macron had already hinted he wanted to increase military spending earlier this year, and from the start of his first term in 2017 to the end of his second term in 2027 he will have doubled<\/a> France\u2019s defence spending to \u20ac64 billion.<\/p>\n

In a sense, Macron\u2019s measures allow him to put his money where his mouth is. Despite having<\/a> the most operationally effectice force in Western Europe, France\u2019s defence budget has been lagging behind those of Germany and the UK. The country\u2019s major fiscal problems make it difficult to see how it could fulfil a leadership role in maintaining Europe\u2019s defence. To the President\u2019s credit, a lesser politician would have been happy planning increased expenditure for their successors to deal with.<\/p>\n

Macron\u2019s speech was followed up on Tuesday by his Prime Minister Fran\u00e7ois Bayrou announcing<\/a> a \u20ac44 billion budget squeeze. The tone was equally sombre, with the PM warning that France could become the next Greece if major cuts aren\u2019t made. As a share of GDP, France has<\/a> the EU\u2019s highest rate of taxes and social contributions (45.6% of GDP in 2023) and the highest government expenditure (57% in 2023). French debt is at 113% of GDP, only behind Italy and Greece, and was projected to increase to 118.1% in 2027 before Bayrou\u2019s speech. The stakes are high. The IMF has this week been encouraging<\/a> France to make cuts, especially in its administration and social security. Rating agencies have been keeping close tabs, too.<\/p>\n

Not only did Bayrou announce tax increases and spending cuts, but he also floated the idea of axing two public holidays: 8 May and Easter Monday. He didn\u2019t stop there: he fleshed out a \u201csolidarity contribution\u201d from the highest earners and cut state aid schemes for French companies. He announced a \u201cblank year\u201d for public spending, with a freeze on public salaries and benefits (the latter are usually adjusted for inflation). France\u2019s health budget will also need to find \u20ac5 billion in savings. It did not take long for opponents of the French government at home and abroad to connect the dots between the two speeches, and accuse Macron of paying for guns by cutting<\/a>\u00a0butter.<\/p>\n

Truthfully, though, France\u2019s fiscal woes have little to do with defence spending. In 2024, only \u20ac31 of every \u20ac1000 of public spending went towards the military<\/a>. That\u2019s a fraction of what the country spends on healthcare (\u20ac201) or pensions (\u20ac251). France spends over a billion euros a day on pensions. In other words, Macron\u2019s defence budget hike in 2026 could be covered by just three days of pension spending. In fact, pensions have generated<\/a> half of the debt increase since his election in 2017.<\/p>\n

Even still, this may not matter in a few weeks. Macron still lacks a majority in parliament and could see his government deposed at any moment. Last year\u2019s much less ambitious budget caused the collapse<\/a> of Michel Barnier\u2019s government. His successor Bayrou will somehow have to convince some opposition MPs to help him pass one of the most toxic budgets in recent history. If no progress can be made, Macron may have no other option but to spook financial markets and dissolve parliament.<\/p>\n","protected":false},"excerpt":{"rendered":"Bastille Day usually makes international headlines for its fantastically choreographed military parade. This year, however, it also provided…\n","protected":false},"author":2,"featured_media":268662,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5309],"tags":[34,2000,299,36,37,14614,11187,980,1411,285],"class_list":{"0":"post-268661","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-france","8":"tag-emmanuel-macron","9":"tag-eu","10":"tag-europe","11":"tag-france","12":"tag-francois-bayrou","13":"tag-michel-barnier","14":"tag-non-classifiu00e9e","15":"tag-optional","16":"tag-paris","17":"tag-politics"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114867260841873759","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/268661","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=268661"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/268661\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/268662"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=268661"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=268661"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=268661"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}