"They will 'freeze' expenditures by €6 billion."
The impact of the war in the Middle East on French public finances is currently estimated at €4–6 billion, French Minister of Economy Roland Lescure stated in an interview with RTL radio on Tuesday, April 21. "This is the order of magnitude of the cost of the crisis at this stage," he clarified.
His statement came ahead of a meeting of the Committee for the Prevention of Risks to Public Finances at the Ministry of Economy, where the government was considering additional budgetary austerity measures, reported International French Radio in Russian.
Following this meeting, Minister for Public Finances David Amiel announced that this year the authorities may "freeze" expenditures by €6 billion. According to him, the savings will amount to €4 billion in the state budget and €2 billion in the social security budget.
At the same time, the government intends to keep the state budget deficit at the previously planned level of 5% of GDP this year.
Among the economic consequences of the war is the increase in costs for servicing public debt associated with inflation. It is already expected that these expenditures will increase by €3.6 billion in 2026, which is approximately €300 million per month. Rising inflation leads to higher interest rates set by central banks, increasing the cost of borrowing for the state. Reuters notes that the current yield on 10-year French government bonds hovers around 3.6% — up from 3.2% before the outbreak of the war in the Middle East. Additionally, due to accelerating inflation, indexed government expenditures are also rising. Additional unplanned expenses in the context of the geopolitical crisis were required for the French armed forces, quotes AFP a letter sent by Prime Minister Sébastien Lecornu to the ministers.
Inflation in France rose from 0.9% in February to 1.7% in March and may continue to rise, particularly due to rising energy prices. In April, due to the energy crisis, the government lowered its economic growth forecast to 0.9% in 2026 and raised its inflation forecast to 1.9%.
Since the beginning of the war in the Middle East, the government has allocated €130 million in support for specific sectors — for transport workers, fishermen, and farmers. This week, the Ministry of Economy announced that these support measures would be extended until the end of May. However, many consider these measures insufficient. Their extension to other sectors is being demanded, in particular, by medical and social workers who have to increase their fuel expenses due to rising fuel prices.
Chairman of the Budget Committee of the National Assembly Éric Coquerel sharply criticized the government's plans, stating that they would have a "guaranteed recessionary impact on the economy, growth, and tax revenues" and are "unfair and economically foolish."
