France will borrow a record €340 billion in 2027 to refinance Covid-era debt and fund government spending, the public debt management office announced on Tuesday. The AFT agency said the issuance, €28 billion higher than this year, will include medium- and long-term bonds to cover rising borrowing costs and debt redemptions.
French 10-year bond yields hit 4.8 percent on secondary markets Tuesday, above the government’s 4.3 percent forecast for 2027. Investors have grown wary as France’s public deficit widened to 5.1 percent of GDP last year and is now projected to reach 5.4 percent in 2026, exceeding the EU’s 3 percent ceiling. Higher interest payments reduce funds available for current spending, the AFT noted.
Prime Minister Sébastien Lecornu pledged earlier this month to cut the deficit in 2027 without austerity measures, but analysts warn the task will be complicated by upcoming presidential elections. The borrowing plan was unveiled two days before the 2027 budget presentation, as concerns mount over France’s fiscal trajectory amid the highest borrowing rates since the global financial crisis .
