France to Borrow Record €340 Billion in 2027 Amid Soaring Public Debt at 119% of GDP

France is set to borrow a historic €340 billion in 2027, significantly higher than previous years, as the country contends with unprecedented public debt levels reaching 119% of its GDP—the highest since 1946. This borrowing surge, representing an €80 billion increase over five years, primarily aims to refinance maturing debts incurred during the COVID-19 pandemic and energy crises, alongside addressing persistent budget deficits.

Details from the Agence France Trésor and France’s National Institute of Statistics (INSEE) reveal that €189.2 billion of the 2027 borrowing will be dedicated to refinancing debts, up €19.4 billion compared to 2026. This refinancing need is compounded by the cessation of European recovery plan funding in 2026, forcing greater reliance on market financing. Although the government targets to reduce the budget deficit to 5% of GDP, recent data shows it could reach 5.4% this year.

The cost of servicing France’s swelling debt is projected to escalate, with state debt interest expected to soar to around €91 billion by 2027, up from €62.6 billion in 2026. Bond yields have reflected investor concerns, with the yield on French 10-year bonds climbing to approximately 4.7%—widening the spread with Germany’s 3.6%—indicating increased perceived risk amid tightening bond markets and political uncertainty ahead of the presidential election.

Economists point to France’s borrowing as the highest in the European Union outside of Greece and Italy, but stress that France’s strong private sector assets provide some stabilization. Government forecasts suggest public debt could rise further to 122% of GDP by 2027. Finance Minister Roland Lescure emphasized the gravity of the situation, noting the record borrowing requirements and the challenges posed by high deficits and refinancing needs.

In response, the government is preparing austerity measures totaling €54 billion in the upcoming budget to reassure investors and manage the fiscal trajectory. Nonetheless, analysts warn that France's public finances face a delicate balance amid persistent economic headwinds, increased debt service costs, and economic uncertainties.

The combination of historic debt, elevated borrowing, and higher interest costs marks a critical moment for France’s fiscal policy and economic stability moving into 2027.