The International Monetary Fund has delivered a strong warning to France over its persistently high public spending and elevated debt levels, cautioning that the pace of fiscal consolidation remains too slow and carries significant risks to debt sustainability.
In assessment of the country, released on May 21 following consultations held on May 11-21, the IMF noted that France’s public spending reached 57.5 per cent of GDP in 2025 — the highest level in the euro area.
That figure sits well above the eurozone average of close to 49 per cent and contrasts sharply with Germany and Italy, underscoring the structural weight of the French State within the wider European economy.
While the fiscal deficit narrowed to 5.1 per cent of GDP last year, the Fund stressed that consolidation was proceeding more slowly than planned and remained subject to considerable implementation risks.
French public debt stands at around 115 per cent of GDP, almost double the 60 per cent ceiling set by the European Union’s Stability and Growth Pact and the highest among large member states after Italy and Greece.
Without stronger measures, the IMF warned that debt would remain elevated, increasing vulnerability to market pressures and future economic shocks.
Despite progress, administrative barriers remain high in parts of the French economy, weighing on entrepreneurship and competition.
The Fund highlighted growing spending pressures from an ageing population, defence needs and the green and digital transitions as factors complicating efforts to bring the deficit below 3 per cent of GDP by 2029 — the threshold required under the reformed EU fiscal rules that came into force in 2024.
It also noted that, regarding unemployment benefits, the French system remains “relatively generous for certain groups” and acts as a disincentive when used as a “gateway to retirement”.
The IMF urged France to adopt a credible multi-year fiscal strategy focused on reprioritising and rationalising spending rather than relying on further tax increases, given the country’s already high tax burden.
It recommended structural reforms in pensions, unemployment benefits, health, and education to improve efficiency and create fiscal space for priority areas.
“Reprioritising France’s large spending envelope is essential,” the IMF statement said, adding that well-targeted rationalisation efforts could support medium-term growth while preserving equity and protecting the most vulnerable.
The warning comes at a politically sensitive time ahead of the 2027 presidential election, with successive French governments struggling to secure parliamentary support for deeper spending restraint, in particular on pensions.
The IMF emphasised that a front-loaded structural adjustment of around 0.8 per cent of GDP per year over 2027–2029 would be needed to put debt on a firmly downward path and meet EU fiscal rules.
In a reaction to news outlet Les Echos, Manuela Goretti, IMF mission chief, said “This is becoming urgent, given the rapidly changing French demographics. The population is aging. Fertility declines. It is necessary to rethink the country’s spending.”
“France has the highest level of public spending in the euro zone. There is room for efficiency gains,” Goretti added.
She called for an ambitious 2027 budget, while acknowledging that it would be an election year.
French Prime Minister Sébastien Lecornu has announced the abolition of lifelong benefits for former prime ministers.https://t.co/mfQGC8quzN
— Brussels Signal (@brusselssignal) September 16, 2025
