France Faces Budgetary Crossroads Amid Deficit Challenge

France's 2026 budget poses challenges due to the need for deficit reduction and increased military spending. Prime Minister François Bayrou's government aims to cut the budget deficit from 5.4% to 3% by 2029. Finance strategies are being evaluated to balance defense funding without escalating national debt.

France is gearing up for a significant financial undertaking as the government prepares to handle the 2026 budget, balancing the pressing need for deficit reduction with the allocation for increased military spending. Government spokeswoman Sophie Primas cautioned about the challenges in an interview with Public Senat TV on Wednesday.

The effort is spearheaded by centrist Prime Minister François Bayrou, whose administration is focused on reducing the public sector budget deficit, which stands at 5.4% of economic output. The goal is to decrease this figure to the European Union's cap of 3% by 2029, a monumental task given France's current fiscal condition.

Finance Minister Eric Lombard highlighted ongoing work to elevate defense spending responsibly, ensuring it neither inflates the country's debt nor jeopardizes its prized welfare system. The government is committed to an inclusive budget process engaging a wide spectrum of social and parliamentary members.

(With inputs from agencies.)