France’s Court of Auditors has issued a stark warning about the nation’s escalating public debt and the unsustainable trajectory of social spending. The court cautioned that without significant fiscal reforms, France risks a “liquidity crisis” as early as 2027, jeopardizing the government’s ability to meet its financial obligations and maintain its social safety net. The 2024 deficit for social security alone reached €15.3 billion, with projections indicating a €22.1 billion shortfall for 2025.
The Court of Auditors criticized the government’s reliance on optimistic economic forecasts and temporary tax measures to address the deficit, labeling the current fiscal strategy as inadequate. Pierre Moscovici, President of the Court, emphasized the urgency of implementing structural reforms to regain control over public finances and avert a potential financial crisis.
This fiscal strain is compounded by France’s growing public debt, which has reached unprecedented levels. The government’s ambitious deficit reduction targets are increasingly viewed as unrealistic by financial experts, who warn that without substantial spending cuts and tax reforms, the country may face severe economic consequences.
The situation presents a formidable challenge for Prime Minister François Bayrou’s administration, which is already grappling with political fragmentation and opposition from labor unions and left-wing parties. The government’s ability to implement necessary austerity measures and secure legislative support will be critical in determining France’s fiscal stability in the coming years.
