Paris: French Prime Minister Sebastien Lecornu stated on Tuesday that France could no longer finance everything as his government aims to implement spending cuts for the 2027 budget.

According to Anadolu Agency, Lecornu emphasized the necessity of these measures in a letter to his government colleagues, urging them to maintain state spending, excluding defense, at the 2026 levels. This directive necessitates an additional £2.5 billion ($2.9 billion) in savings.

The initiative seeks to establish a spending target of £461.1 billion ($532.6 billion), a reduction from the previously planned £463.6 billion ($535.5 billion). The broader objective is to lower France's public deficit to below 5.1% of gross domestic product by 2027. Public Accounts Minister David Amiel has indicated that the strategy should include at least £6 billion ($6.9 billion) in measures affecting retirees.

Lecornu also noted a downward revision in France's growth forecast for 2026 to 0.5%, with inflation estimated at 2.1%. He highlighted the impact of higher borrowing costs on public finances, describing these fiscal challenges as neither abstract nor temporary. For 2027, the government anticipates 1% growth, contingent on easing international tensions and restoring shipping operations through the Strait of Hormuz.

The spending rule, described by Lecornu as 'zero value,' implies that state spending will remain at the same nominal euro amount, without adjustments for inflation. Defense spending is excluded from this freeze and will continue to rise. The spending constraint applies only to state expenditure, excluding health care, pensions, and local government spending, which are managed under separate budgets.

The 'zero value' rule is a familiar approach in France, initially introduced under former President Nicolas Sarkozy for the 2012 budget. The government applied this principle in preparing the 2026 budget, and Lecornu now seeks to extend it into 2027.