How to refill the state’s coffers? Bercy holds a public finance alert committee amid uncertainties linked to the crisis in the Middle East. The government wants to assess the economic situation and “shed light on decisions” to meet the deficit target for 2026. “The aim is to identify any potential drifts and take corrective measures quickly,” explained Economy Minister Roland Lescure to Le Parisien.
The committee will meet on Tuesday, April 21 at the Ministry of Finance. Members of parliament, representatives from social security, unions, or local authorities will gather with Economy Minister Roland Lescure, Public Accounts minister David Amiel, Labour minister Jean-Pierre Farandou, Health minister Stéphanie Rist, and Territorial Development minister Françoise Gatel.
Prior to this meeting, the government slightly revised downwards its economic growth forecast to 0.9% in 2026 (from 1% previously) and revised upwards its inflation forecast to 1.9% (from 1.3%). It, however, maintains its target of a 5% deficit this year and its commitment to bring it below 3% by 2029, as requested by Brussels.
Interest rates soaring
This committee is therefore under high pressure. While the government had celebrated a lower-than-expected deficit in 2025 – 5.1% of GDP compared to the Insee’s forecast of 5.4% – the Middle East conflict has disrupted the global and French economies. Oil and gas prices surged following the closure of the Strait of Hormuz after the Israeli-American offensive in late February.
And the war in Iran costs the public finances dearly. The government has already announced €130 million in crisis support spending: €70 million to assist transporters, fishermen, and farmers, and €60 million to strengthen the energy check.
But it’s mainly the debt burden, i.e., the interest rate at which France borrows on the markets, that weighs heavily on the budget. According to Bercy, the conflict leads to “a significant increase in the debt service,” with the crisis cost “estimated at around €4 billion.”
Credit cancellations
With about €75 billion by the end of the year, the debt burden becomes the primary expense item ahead of national education. A stark observation that requires action from the executive. The government will have to announce a first set of savings measures of around €4 billion, according to Les Echos.
According to Le Monde, their total could even reach €6 billion, with around €2 billion for social security and €4 billion for the state. This amount has neither been confirmed nor refuted by Bercy. State and social security credit cancellations could be on the table. According to the national newspaper, some credits will also be temporarily frozen. “Any new public expenditure that may be necessary due to the crisis” will lead to “a cancellation of a planned expenditure, to the euro near,” warned David Amiel in late March.
The possibility of further cuts in employer social contribution exemptions on salaries up to three times the minimum wage is being considered, as reported by Les Echos. “Things are not decided yet,” says Bercy. The only certainty, according to Le Monde, is that local authorities will be kept out of this plan.
Last year, the public finance alert committee convened twice. The first time on April 15, around former Prime Minister François Bayrou, who warned the French about the debt “trap” threatening “the country’s survival.” Then, on June 26, to announce an additional brake of €5 billion on public spending to meet the deficit target.
