Last week, the French Parliament approved an emergency law aimed at ensuring the continued provision of public services until January 2026, pending the approval of a sufficient budget to cover the expenses of 2026.
In a related context, the French Treasury Agency (AFT), the entity responsible for managing public debt, announced on Tuesday that France expects to borrow a record amount from the markets, estimated at 310 billion euros, during the next year, which is in line with previously established plans, despite the absence of an approved budget for 2026.
According to the agency’s statement in its funding program for 2026, borrowing may begin as early as January, noting that the annual amount will be adjustable according to what is approved in the financial law for 2026.
It should be noted that the amount of 310 billion euros announced in October includes the value of all new “medium and long-term” bonds, i.e., bonds with a maturity exceeding one year, after deducting early debt repurchase operations by the state.
Although this figure is considered a record, it represents only about 10% of the gross domestic product, compared to the wealth produced during the year, which is a slight change compared to 2025.
According to figures from Agence France-Presse, the state borrowed a net amount of 300 billion euros in medium and long-term debt in 2025, which is an increase compared to 2024, where this amount reached 285 billion euros.
This increase in the volume of borrowing comes at a time when public debt has reached a new record level in the third quarter, approaching 3.5 trillion euros, coinciding with rising borrowing costs in the markets.
The French Treasury stated that France borrowed in 2025 at an average interest rate of 3.14% for medium and long-term bonds, compared to 2.91% in 2024.
Regarding ten-year bonds, which are considered the benchmark in the market, the interest rate on them rose from 2.94% to 3.37%.
According to French media, this increase is mainly attributed to the general increase in interest rates throughout Europe, after Germany, which is considered the largest economy in the continent and an advocate of fiscal discipline, decided to increase its debt to finance a huge investment plan.
The media pointed out that in the absence of a budget for next year, “Emmanuel Macron” issued on Saturday a special law allowing the state to collect taxes and borrow from the markets, after the approval of the National Assembly and the Senate.
The media pointed out that budget discussions are scheduled to resume in Parliament in “January 2026.” (Russia Today)
