President Emmanuel Macron aims to bolster France’s defence budget amid growing concerns over European security, particularly as the U.S. signals a potential shift in its commitments.
However, funding this expansion while managing a stubbornly high deficit presents a major challenge.
France, which carries one of the largest budget deficits in the European Union, faces increasing pressure to curb overall spending. Its 2025 budget was only approved last month after prolonged delays in a deeply divided parliament. Now, new geopolitical concerns—fueled by U.S. President Donald Trump’s overtures to Russia and a temporary freeze on military aid to Ukraine—are likely to add further strain on France’s fiscal policy.
"France is heading towards difficult budgetary trade-offs to reconcile the government's commitment to lower budget deficits while increasing defence spending," Scope Ratings noted in a research report.
A broader push for military investment
France is not alone in rethinking its financial priorities to enhance military capabilities. In Germany, coalition parties recently agreed on a major debt overhaul to enable significant investments in defence and infrastructure. Meanwhile, the European Commission has proposed borrowing up to €150 billion to support EU nations under a new rearmament initiative. Across the Channel, British Prime Minister Keir Starmer has pledged to increase defence spending to 2.5% of GDP by 2027, with a long-term goal of reaching 3%.
‘Go faster and harder’
Macron, who plans to address the nation on Wednesday amid what he calls a "time of great uncertainty," recently told Le Figaro that European countries should aim for defence budgets of "around 3-3.5%" of GDP—far beyond NATO's current 2% target.
France is already set to increase its military budget by €3 billion ($3.15 billion) annually until 2030 under a long-term defence planning law. However, Armed Forces Minister Sébastien Lecornu has indicated that these plans may need revision in response to evolving geopolitical threats.
While France meets NATO's 2% spending requirement, it bears additional financial burdens compared to other members. The country maintains a nuclear deterrent, an aircraft carrier, and advanced domestic weapons programs, including the Rafale fighter jet.
Raising defence spending to 3% of GDP would require an additional €30 billion annually, according to Reuters estimates. Finance Minister Eric Lombard emphasized the urgency of the situation on Franceinfo radio, stating, "We must go faster and harder," but assured that welfare programs would not be sacrificed to fund defence increases.
Macron defended the necessity of making tough budget choices, drawing parallels to the 1960s when President Charles de Gaulle prioritized nuclear deterrence despite financial constraints. "We could have told General De Gaulle regarding the billions spent on nuclear dissuasion, 'Why not use it on French purchasing power instead?'" Macron said.
Political hurdles ahead
Most French political parties, aside from the far left, support increasing defence spending. However, there is little consensus on how to finance it, particularly if it means making significant cuts in other areas.
This challenge was evident last December when opposition parties ousted conservative Prime Minister Michel Barnier after he attempted to push through austerity measures aimed at reducing the deficit—moves that faced resistance from ratings agencies and concerns over mounting debt repayments.
Unlike Britain, which is offsetting its defence spending hike by cutting development aid, France has already reduced such expenditures by more than 30% in the 2025 budget, limiting its options.
Finance Minister Lombard has ruled out corporate tax hikes to fund defence spending but suggested that wealthier individuals could contribute more. This proposal aligns with calls from left-wing parties, including the Socialists, who have advocated for "fiscal patriotism" as a means of supporting national security.
However, France’s tight fiscal constraints remain a significant obstacle. The government is working to narrow its budget deficit to 5.4% of GDP, aiming to meet the EU’s 3% ceiling by 2029. A European Commission proposal to exempt defence spending from EU deficit calculations could provide some relief, though it would not reduce France’s overall debt burden.
"We are facing budget constraints," Lombard admitted. "We have €3.3 trillion in debt, meaning we pay over €50 billion annually in interest—about the same as our entire defence budget."
As Macron navigates these financial and political obstacles, the challenge remains: how to balance national security ambitions with economic realities. Photo by Remi Jouan, Wikimedia commons.