France is sticking to its strict budget rules to keep its public finances in order. The second meeting of the Public Finances Alert Committee took place at the Ministry of Economy in Paris on June 26, 2025. They made it clear that more action is needed: to reach the 2025 deficit target of 5.4% of GDP, an extra €5 billion in spending cuts are needed.
The goal of this effort is to stabilize the country’s finances and set up a strong base for the 2026 budget. This is what’s at stake and how France plans to get it done.
A Very Important Push for Financial Responsibility
Catherine Vautrin (Minister of Labor, Health, Solidarity, and Families), Eric Lombard (Minister of Economy, Finance, and Industrial and Digital Sovereignty), François Rebsamen (Minister of Territorial Development and Decentralization), and Amélie de Montchalin (Minister of Public Accounts) led the meeting. It made it clear how important it was for France to meet its financial obligations.
The goal of a 5.4% deficit is still possible, but it depends on cutting spending right away.
The committee found an extra €5 billion in savings that will start this summer and will focus on two main areas:
- €3 billion from state budgets: This money will not be used this year, and a reserve fund will be set up in the next few weeks.
- €1.7 billion from healthcare costs: The National Healthcare Expenditure Target (Ondam) committee sent out an alert, and as a result, some Social Security Finance Law provisions will be put into effect right away, some reserves will be canceled, and cost-control measures in healthcare will be made stronger.
A follow-up meeting with the ministry secretaries-general and financial directors is set for July 4 to make sure these cuts are put into effect properly.
Savings Area Action Plan
| Amount (€ billion) | Savings Area | Action Plan |
|---|---|---|
| 3.0 | State Budgets | Unallocated funds and a supplementary reserve to be notified |
| 1.7 | Healthcare Spending (Ondam) | Put the Social Security Finance Law into effect, get rid of reserves, and improve controls |
Budget Pressures in the Spotlight
There are still problems, even though things are getting better. The initial Finance Law’s revenue projections are still valid, but spending pressures are starting to show:
- State Budget: Even though €5 billion in cost-cutting measures have already been put in place this year, some ministries are still at risk of going over their budgets.
- Social Security: The Ondam committee warned that costs could go up by €1.3 billion because of daily indemnity costs, public hospital spending, and delays in putting some Social Security financing measures into place.
- Local Governments: Operating costs, especially in cities, are going up a little faster than expected.
Budget Risks Table
| Sector | Issue | Estimated Risk (€ billion) |
|---|---|---|
| State Budget | Possible overspending by the ministry | Not measured |
| Social Security | Rising payments, hospital costs, and delays | 1.3 |
| Local Governments | Operating costs are higher than expected | Not measured |
What Does the Public Finances Alert Committee Do?
The Public Finances Alert Committee’s job is to make sure that France’s fiscal path is clear. Some of its goals are:
- Finding out what risks and unknowns there are in carrying out the budget.
- Suggesting ways to cut the deficit and keep an eye on government spending, in line with the Prime Minister’s promises in the General Policy Statement.
The committee is made up of a wide range of people, such as members of parliament, local government officials, social security fund officials, labor union leaders, and people from the Court of Accounts, Bank of France, and INSEE.
Committee Role and Main Duties
| Committee Role | Main Duties |
|---|---|
| Monitor and Report | Monitor and report on risks to the fiscal trajectory |
| Cutting the Deficit | Suggest steps to reach the 5.4% of GDP deficit goal for 2025 |
| Working with Stakeholders | Get parliament, local governments, social security, unions, and other groups involved |
Why It’s Important
In a shaky economy, these extra €5 billion in savings are a very important step for France to reach its budget goals.
The goal of these steps is not only to reach the deficit goal for 2025, but also to lay the groundwork for a solid budget for 2026. The government’s proactive stance shows that it is committed to long-term financial stability, even though spending pressures are rising.
Looking Ahead
The meeting on July 4 will be very important for putting these plans into action. Ministries and agencies will have to move quickly to make the cuts while also dealing with economic uncertainty.
This renewed focus on fiscal discipline gives taxpayers and citizens hope for long-term public finances, but it also shows how hard it is to keep costs down without hurting growth.