France rules out broad energy aid despite lower deficit

Prime Minister Sebastien Lecornu has ruled out using fiscal flexibility from a lower-than-expected budget deficit to provide broad financial aid to businesses or consumers facing high energy costs. Despite the improved fiscal outlook in France, the government remains committed to a path of fiscal restraint. The administration is currently facing pressure from opposition parties to introduce fuel tax cuts and other measures to mitigate the impact of rising oil and gas prices. These price increases have been largely driven by the ongoing conflict involving Iran. According to the national statistics agency INSEE, the 2025 public accounts showed a fiscal shortfall of 5.1% of economic output, which is an improvement from 5.8% in 2024 and better than the previous government estimate of 5.4%.

Lecornu dismissed the idea that the reduced deficit provided extra funds for spending during a meeting at the finance ministry.