France debt set to rise to 121.7% of GDP in 2027

That matters because France is no longer just missing EU rules — it is drifting farther away from them. The country’s deficit was 5.1% of GDP last year and is forecast at 5.4% this year, well above the bloc’s 3% ceiling, putting Paris under special EU monitoring for a second year.

For investors, the key issue is borrowing costs. A debt path that keeps worsening while deficits stay elevated tends to pressure sovereign spreads, weaken confidence in fiscal discipline and raise the risk premium on French assets. The news comes as France already ranks third in the euro zone for debt ratios, behind only Greece and Italy, even as Spain and Portugal have moved lower.

The timing is awkward politically. France expects the deficit to ease only slightly to 5% next year, with presidential and parliamentary elections due, leaving little room for unpopular spending cuts or tax rises. That makes the 2027 budget process, now under review by the independent High Council of Public Finance, a test of whether the government can present measures credible enough to stabilize the debt trajectory.

The broader narrative is that France is entering a period where fiscal weakness is colliding with political uncertainty and tighter financing conditions. If the government fails to narrow the deficit, the debt burden will keep compounding, leaving markets to question how long France can rely on growth alone to repair its balance sheet.