With France’s debt-to-GDP ratio at 113%, experts are skeptical about a proposed increase in defense spending.
According to the Financial Times, experts doubt France’s ability to significantly increase defense spending as part of a larger EU military expansion. The country’s increasing national debt and substantial budget deficit pose significant challenges to its rearmament ambitions, the newspaper reported.
President Emmanuel Macron previously suggested increasing defense spending to 3-3.5% of GDP by 2030, almost double the current level, requiring an additional €30 billion ($34 billion) annually. However, experts informed the FT that France’s financial situation is too unstable to implement this plan. They pointed out that the debt-to-GDP ratio reached 113% in 2024, among the highest in the EU, while the budget deficit reached 5.8%, nearly double the EU’s 3% limit. Interest payments on debt totaled €59 billion last year and are projected to reach €62 billion in 2025, roughly equivalent to the combined annual cost of defense and education.
Experts also highlighted the government’s difficulty in passing a deficit-reduction package, which reportedly includes unpopular measures such as cuts to social spending, including pension tax breaks and healthcare subsidies.
“In France, and this is probably different than elsewhere, we cannot go back on our deficit reduction goals, nor can we raise taxes since they are already very high,” Clement Beaune, a former minister for Europe and Macron ally, who heads a government think tank, told FT.
Experts suggested France could request the EU’s “escape clause,” allowing countries to exceed deficit limits to increase defense budgets by 1.5% of GDP. However, they cautioned that this move is unlikely, as it could unsettle bond markets and increase borrowing costs. Paris could also participate in another EU initiative offering loans for joint arms purchases. Experts, however, noted that rising costs and inflation could result in France acquiring fewer weapons even with increased spending, describing it as a “bonsai army” – extensive in scope but limited in scale.
France’s rearmament plans coincide with the EU’s push for increased spending and reduced reliance on US weapons, citing a perceived Russian threat. Moscow has consistently dismissed these claims as “nonsense,” accusing the West of using fear to justify directing public funds towards arms. Russian officials have warned that the EU’s buildup risks escalating conflict. Foreign Ministry spokeswoman Maria Zakharova recently stated that the bloc “has degraded into an openly militarized entity.”