The following is an adapted version of an article written by Réka Csepeli, a research fellow at the Europe Strategy Institute of the University of Public Service, originally published in Hungarian on the Five Minutes Europe blog of Ludovika.hu.
Historic debt levels, widespread discontent affecting virtually every level of French society, and even a sense of hopelessness… With just over six months to go before the presidential election, the dire economic and social situation of the EU’s second-largest contributor clearly cannot be addressed without considering its implications for the European context.
Meanwhile, the EU summit that began on 15 October in Brussels—intended to discuss the long-term budget for 2028–2034—is itself fraught with tension, dividing member states between those supporting austerity measures and those advocating more ambitious investments. Understanding these two parallel dynamics—and the connections between the French and European budget debates—is all the more necessary because, without it, we are merely horrified spectators of images documenting the social unrest unfolding in France, without grasping the deeper meaning of what this is actually about. Furthermore, we must recognize that the processes unfolding here will clearly have repercussions for the rest of Europe.
The EU’s Funding System in a Nutshell
The EU’s financing system and the MFF (Multiannual Financial Framework) are closely linked. Each year, a new annual budget is negotiated and adopted. It sets out expenditures and revenues for the fiscal year in accordance with the spending limits established in the current long-term budget. The EU’s financing system determines the sources of the Union’s revenue (contributions from member states, customs duties, and VAT-based resources). The MFF determines how much money the EU can spend over the next seven years and for what main purposes. It sets spending ceilings in areas such as agriculture, cohesion policy, research, and infrastructure. In other words, the financing system provides the financial resources, while the MFF provides a framework for their long-term use. The increase in contributions is mainly due to the EU’s growing funding needs, the consequences of Brexit, and additional expenditures related to COVID-19 and support for Ukraine.
Under pressure from certain net contributor countries—sometimes referred to as ‘stingy’—the Irish presidency plans to cut the European Commission’s proposed budget for the next seven years by 8 per cent. On 10 October, the Irish Presidency tabled the latest draft for negotiations on the EU’s 2028–2034 budget. The document would allow 1,622 billion euros in spending at 2025 prices: 141 billion less than the Commission’s proposal and 108 billion less than the compromise reached by the Cypriot presidency in June. As for reaching an agreement, it is already clear that another EU summit will be held in November, and an agreement may realistically be reached as early as next March. This date is important because it precedes the French presidential election and the Polish parliamentary elections. The results of these elections could potentially influence the shape of the draft budget. The MFF must meet two seemingly contradictory expectations: on the one hand, several member states—particularly the largest contributors—are facing serious budgetary problems, which explains their resistance to increasing contributions. At the same time, in the current international situation—characterized by multiple crises—we need a Europe stronger than ever, which in turn requires more money. To reduce the budget while also modernizing it and making it more flexible—this formula, which suggests trying to square the circle, is what the next seven-year budget must achieve.
EU Contribution Takes Centre Stage in French Budget Debate
Amid a tense fiscal situation, the National Assembly voted on France’s contribution to the European budget on Wednesday, 14 October, as part of its review of the draft 2027 budget bill. Under the approved contribution, the country will contribute nearly 31 billion (30.9 billion) euros to the EU budget (compared to 28.8 billion euros in 2026), while also receiving several billion euros in aid as the primary beneficiary of the CAP. A large majority of French National Members of Parliament are increasingly critical of regular increases in EU contributions—several factors may explain their resistance to year-on-year increases. The first round of the presidential election will take place in just over six months, on 12 April 2027. The looming prospect of an election that will fundamentally shape the country’s political landscape, combined with the pressure on public finances, has understandably set the tone for the debate over France’s EU contributions.
For many years—more precisely, since the last balanced budget in 1974—the country has struggled with massive, ever-growing debt. Today, the French budget deficit stands at 3,634 billion euros, at 119 per cent of the country’s GDP. French public debt is expected to reach a record high in 2027, at 121.7 per cent of GDP. The most alarming sign, however, is rising interest rates. France’s ten-year interest rate is approaching 5 per cent in the debt market, and representatives of major international financial institutions have recently expressed concern over the surge in French bond yields.
‘For many years…the country has struggled with massive, ever-growing debt’
France’s 2027 draft budget, under debate in the National Assembly since Tuesday, aims to reduce the public deficit to 5 per cent of gross domestic product (GDP) from 5.4 per cent in 2026. (It is worth recalling the EU rule stipulating that member states’ budget deficits may not exceed 3 per cent of GDP.) However, the French National Assembly’s adoption of this 5 per cent limit appears highly uncertain due to the lack of a majority and the approaching presidential election. In this context, representatives of various political parties—all of which are already throwing their full weight behind the presidential election—have exploited the momentum of the budget debate regarding EU contributions to bolster their own political capital. Accordingly, the National Rally criticized the proposal to finalize the EU budget for the 2028–2034 period before the presidential election, calling it a ‘serious democratic problem’. Their representative, Jean-Philippe Tanguy, proposed an amendment that would reduce the planned contribution by 11.1 billion euros, bringing it to 19.8 billion euros. His stated goal was to limit France’s net contribution (excluding the economic stimulus plan) to 5 billion euros after deducting the European funds received. According to Éric Coquerel, chair of the National Assembly’s Finance Committee, speaking on behalf of La France Insoumise, ‘in its current form, the European Union remains the Trojan horse of neoliberalism’. His group submitted numerous amendments—all of which were rejected but sparked lively debates—proposing a significant reduction in France’s contribution, as low as 10 per cent if certain conditions were not met.
The Shadow of Unabating Social Discontent
Meanwhile, the social discontent that continues to simmer in the background set the tone for the budget debate in the National Assembly from the outset. On Tuesday, 13 October, high school and college students resumed their street blockades, with unexpected support from Swedish activist Greta Thunberg, alongside whom they protested in numerous cities. A general social mobilization on 17 October was announced, marking the convergence of high school students and the ‘yellow vests’, and thus potentially intensifying the movement. The forced drawing of parallels—which are regularly drawn from history and are often quite anachronistic—should definitely be avoided… however, in relation to our case, the image of one (or even several) movements originating from social discontent in France automatically comes to mind, movements that, following their outbreak and following their model, spread throughout Europe.
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