Economist Olivier Blanchard: ‘Reducing France’s deficit requires taking unpopular measures, which no one dares to announce’

Olivier Blanchard, former chief economist of the International Monetary Fund, says France faces a dangerous budget situation as weak growth and political deadlock limit efforts to reduce its deficit. He warns that the measures needed to restore confidence would be unpopular, making them difficult for politicians to propose before the presidential election.

France is paying 1.5 percentage points more than Germany to borrow, reflecting a risk premium linked to concerns about its debt. Blanchard says the current budget would make only modest savings, while further cuts could weaken activity, household purchasing power and business investment; if investors lose confidence, borrowing costs could rise sharply and force a harsher adjustment. He also criticises the economic platforms of both the far-right National Rally and the radical-left La France Insoumise as likely to concern investors.