France unveils €54 billion austerity budget as deficit battle intensifies

On October 1, 2026 French Prime Minister Sébastien Lecornu presented the draft 2027 national budget to the Council of Ministers, a €54 billion (around $60 billion) package aimed at cutting the public deficit from an expected 5.4% of GDP in 2026 to 5.0% in 2027. The plan freezes public-sector wages and all but the lowest pensions, limits pension indexation, tightens sick-leave rules and raises targeted taxes. France's independent fiscal watchdog called the savings 'limited' given the scale of the challenge, while left-wing parties and trade unions denounced a 'bitter austerity potion'. France's 10-year borrowing cost hit 4.94%, its highest since 2002, as investors fretted about political fragility; the CAC 40 slipped 0.46%. The budget sets up a bruising autumn battle in parliament and on the streets of Paris, with unions already preparing fresh protests.