On 3 July 2026, the Council of the European Union adopted a recommendation outlining economic, social, employment, structural and budgetary policies for France under the European Semester. The recommendation urges France to adhere to the net expenditure growth limits in its medium-term fiscal-structural plan—1.2% annually from 2026 to 2028 and 1.1% in 2029—and to implement a comprehensive fiscal strategy to permanently reduce public spending and bring debt onto a downward path.
The recommendation notes that France's excessive deficit procedure was held in abeyance as of 3 June 2026, based on the Commission's assessment. According to the Commission's Spring 2026 Forecast, France's general government deficit stood at 5.1% of GDP in 2025 and is projected at 5.1% in 2026 and 5.7% in 2027. General government debt reached 115.6% of GDP at end-2025 and is projected to rise to 118.1% by end-2026 and 120.2% by end-2027.
The Council highlights that the suspension of the 2023 pension reform until January 2028 is worsening the budget balance and increasing public debt. France is recommended to address the fiscal impact of the suspended reform. The tax burden, at 44.3% of GDP in 2025, remains significantly above the EU average of 39.9%; the Council advises reducing taxes on labour and production while raising consumption and environmental taxes, and rationalising fiscal expenditures.
France should also reduce administrative complexity and clarify competences and financial responsibilities across levels of government. Persistent regional disparities in public services—healthcare, education, mobility, housing—are noted, with outermost regions facing additional challenges.
Stakeholder impact - French government: Must deliver on the net expenditure path and pursue lasting spending cuts, which may require politically difficult reforms, including addressing the suspended pension reform. - French taxpayers and businesses: Could benefit from reduced taxes on labour and production, but may face higher consumption and environmental taxes. - Public sector employees and pensioners: Spending cuts and pension reform adjustments could affect public sector jobs and retirement benefits. - Regional authorities: Clarification of competences and financial responsibilities may lead to more efficient service delivery but could also shift fiscal burdens.
The recommendation is part of the European Semester cycle and will inform France's policy planning. The Council's recommendation is non-binding but carries political weight; France is expected to report on progress in its upcoming national reform programme.