"Budgetary Himalayas , " "death trap"... For several months, the government has been doubling down on its claims to convince the French of the absolute necessity of reducing spending. The debt has reached 114% of GDP, while the public deficit stands at 5.8%. The government's objective: to bring the deficit below 3% by 2029.
Also read
Interview on 40 billion euros in savings: "The government is starting from the wrong conclusions and arriving at the wrong solutions"
But then, how does François Bayrou 's government plan to find 40 billion euros to save money in 2026? Many avenues have been discussed, with no certainty yet. "Bayrou takes everything, but no one knows what he'll keep," one of his interlocutors told AFP on Saturday.
While waiting for the Prime Minister's response, who will speak on Tuesday, July 15, here are the main options on the table.
• Decree a “blank year”
This is the most likely hypothesis, the one that keeps coming up. Declaring a " blank year " would consist of maintaining certain expenses unchanged between 2025 and 2026, without any increase, with the advantage of not being too drastic. But the resources expected from this source of savings vary significantly depending on the scope chosen.
According to the Senate Finance Committee, freezing state spending on its budgetary missions (excluding defense, contributions to the EU budget, and debt repayments) between 2025 and 2026 could generate €10 billion.
According to the French Economic Observatory (OFCE) and the Institute of Public Policy (IPP), a blank year could save between 5.7 and 6 billion euros.
• De-index pensions
The idea of de-indexing retirement pensions in relation to inflation is gaining ground, reinforced by a proposal to this effect from the Pensions Monitoring Committee (CSR), and supported by several parliamentarians from the government camp.
In the context of a "blank year", refraining from indexing retirement pensions to inflation would bring in 3.7 billion euros, according to figures from the OFCE.
Also read
Chronicle: How to cut the budget by 40 billion euros without making too many enemies?
In this equation in 2026, nearly 10 million households whose "reference person is retired" would see their disposable income reduced by several hundred euros, again according to the OFCE.
• Reduce social protection
Several avenues have been put forward in recent months to reduce the social protection deficit (Social Security, unemployment insurance, supplementary pensions), notably through Health Insurance, which is expected to experience a gap of 16 billion euros in 2025.
At the end of June, she proposed saving 3.9 billion euros in 2026 by improving the relevance of care, combating fraud, regulating prices, strengthening prevention and reforming daily allowances.
On the pension insurance side, where the deficit is lower (around 6 billion euros in 2025), many stakeholders have called for pensioners to contribute, either by de-indexing pensions or by increasing the CSG, which could, if necessary, spare the most modest pensioners.
According to "Les Echos" , the government is also considering a further tightening of unemployment insurance rules. "The target is the conditions of affiliation, that is to say the minimum conditions for receiving unemployment benefit," the economic daily reports.
• Freeze the income tax scale
This would involve not reassessing the thresholds for the various brackets, which are usually automatically adjusted each year to neutralize the effects of inflation. Without adjustment, previously non-taxable households will be subject to tax, and others will see their tax levels increase—a red flag waved by several political parties.
At the beginning of 2025, the thresholds for the various brackets were reassessed, which allowed 600,000 taxpayers to avoid becoming liable for tax.
Also read
Eliminating the flat tax could raise up to 9 billion euros a year
In 2026, the OFCE calculates that a freeze on the IR scale could bring in 1.2 billion euros, with an inflation assumption of 1.1%.
• Reform agencies and operators
The Senate estimated that reforming the functioning of the "archipelago" of state operators and agencies, i.e. 434 operators, 317 advisory bodies and 1,153 national public bodies (such as Ademe - for the ecological transition -, the Bio Agency , the National Sports Agency, etc.), would save 540 million euros over several years.
But the government is thinking bigger, aiming for savings of €2 to €3 billion. Some agencies could be merged and some missions cut.
• Limit public sector spending
At the end of April, Prime Minister Matignon urged control of the increase in public sector payroll expenditure. A circular highlighted that the remuneration of 5.8 million public sector employees would cost €107 billion in 2024, an increase of 6.7%.
Certain so-called "categorical" measures (concerning certain categories of civil servants) alone have contributed to increasing the wage bill by 3.7 billion euros in 2024.
The government could also use the lever of job cuts. At the beginning of June, Economy Minister Eric Lombard said he wanted to "reduce the number of civil servants," but was careful not to specify the exact number.
The Senate recommends not replacing one in two retirements in the state civil service (one of the three branches, alongside hospitals and local government, editor's note), with the hoped-for 500 million euros at stake.
In 2025, after abandoning the elimination of 4,000 posts in National Education, the draft budget amended by the Senate provided for the creation of 3,076 jobs for the State and the elimination of 812 posts within operators.
• Increase taxes
The government continues to reassure: there will be no tax increase. But this possibility has not been completely ruled out. "There may be special efforts here and there," François Bayrou said on Thursday. "We will not increase taxes for the middle and working classes," assured Public Accounts Minister Amélie de Montchalin.
Ultimately, "the wealthiest taxpayers" could bear the brunt of the budget, Philippe Bruneau, president of the Cercle des fiscalistes, told AFP. Those earning more than €250,000 per year must currently pay a contribution that guarantees a minimum tax rate of 20% (CRDH). But the left wants to introduce a "Zucman tax" – named after French economist Gabriel Zucman – on the 1,800 "ultra-wealthy" taxpayers with assets exceeding €100 million, by levying 2% of this tax per year, for an annual return of €20 billion.
The Zucman tax was passed in the National Assembly and then rejected in the Senate in June . Economy Minister Eric Lombard is against it but assures that he is working on a new mechanism to "fight against over-optimization" of taxes.
"The very rich are mobile," warns Philippe Bruneau, and may move abroad "in the face of sharp tax increases ." Ultimately, the CSP+ – senior executives, liberal professions, etc. – who are well-off without being rich, could then be the main victims of the tax axe.
• Reduce tax loopholes
Another lever put forward on numerous occasions by Amélie de Montchalin: tackling tax loopholes that cost nearly 80 billion euros each year. According to "Les Echos", "Matignon is considering a general reduction of 10% on all loopholes" .
