The French government faces continued scrutiny over its public finances as the Cour des Comptes, France’s national audit court, released its report on the state of public finances on Thursday, February 19, 2026. Simultaneously, the Constitutional Council is expected to deliver its decision on the 2026 budget, which was adopted by the National Assembly on February 2nd. This dual focus underscores the delicate state of the French economy and the ongoing efforts to rein in spending and reduce the national deficit. The timing is particularly sensitive, following Prime Minister Sébastien Lecornu’s decision to refer three fiscal articles of the budget to the Council for review, including the tax on holding companies.
The Cour des Comptes report, spanning 66 pages, paints a picture of stabilization rather than robust recovery. The report suggests that France managed to halt a concerning trend of escalating deficits in 2025, with the shortfall decreasing to 5.4% of GDP – returning to the level seen in 2023. This followed a peak of 5.8% in 2024. Preliminary figures indicate the deficit may even fall slightly below 5.4% after final accounting. Though, this improvement shouldn’t be misinterpreted as a sign of significant progress, according to the Cour des Comptes.
Limited Fiscal Adjustment and Reliance on Tax Increases
Despite the positive trend, the fiscal adjustment achieved by the Lecornu government has been limited to just 0.4 percentage points of GDP. This falls short of the 1.1 percentage point target set in October 2024 by then-Prime Minister Michel Barnier. Barnier’s government ultimately fell after a motion of censure on December 4, 2024, as reported by La Tribune. The Cour des Comptes characterizes 2025 as “a modest step on the path back towards the threshold of 3%,” a key benchmark for fiscal stability within the European Union.
Critically, the Cour des Comptes report highlights that the deficit reduction was achieved not through substantial cuts in public spending, but rather through approximately €23 billion in increased taxes and levies. This reliance on increased taxation raises concerns about the sustainability of the fiscal strategy and its potential impact on economic growth. The report points to a lack of decisive action in controlling expenditure as a key weakness in the government’s approach.
Concerns Over Spending Controls and Past Criticisms
The situation is further complicated by past criticisms leveled against key figures within the current administration. Philippe Gustin, a close associate of Sébastien Lecornu and recently appointed as a conseiller maître (master counselor) at the Cour des Comptes, was previously flagged by the remarkably same institution in 2021. According to Mediapart, while serving at the Ministry of Overseas France, Gustin, then the director of cabinet, was found to have delegated broad spending authority to numerous colleagues without adequate oversight. This led to concerns about the potential for irregularities and a blurring of responsibilities. Anticor, an anti-corruption organization, similarly reported on this appointment, raising questions about the optics of placing someone previously criticized by the Cour des Comptes in a position of authority within the institution.
Marianne reports that the Cour des Comptes found that several members of the ministerial cabinet – including the director, deputy director, chief of staff and their assistants – were granted the power to approve expenditures without limits on amount or type. This broad delegation of authority, coupled with the widespread distribution of purchasing cards, created a situation where accountability was diluted and the scrutiny of spending was compromised.
The 2021 Incident and Gustin’s Reaction
The concerns surrounding Gustin’s conduct extend beyond spending controls. Mediapart revealed that in January 2021, Gustin expressed frustration with reporting on Guadeloupe La 1ère, a French overseas television channel, and reportedly suggested shutting it down, mirroring the fate of France Ô. This incident, revealed through WhatsApp messages exchanged with other advisors to Minister Lecornu, highlights a potential disregard for media independence and a willingness to exert pressure on public broadcasters.
Implications for France’s Economic Outlook
The Cour des Comptes’ report arrives at a critical juncture for the French economy. The country is grappling with high levels of public debt, persistent deficits, and a challenging global economic environment. The reliance on tax increases to address the deficit raises concerns about the potential impact on businesses and consumers, potentially stifling economic growth. The Constitutional Council’s upcoming decision on the 2026 budget will be closely watched, as it could significantly alter the government’s fiscal plans.
The situation also underscores the broader challenges facing France in maintaining fiscal discipline and restoring its economic competitiveness. The country’s high levels of public spending and complex regulatory environment have long been cited as obstacles to growth. The Cour des Comptes’ report serves as a stark reminder of the need for structural reforms and a more sustainable fiscal policy.
The appointment of Philippe Gustin to the Cour des Comptes, despite the previous criticisms, has fueled debate about transparency and accountability within the French government. Critics argue that it exemplifies a culture of patronage and a lack of willingness to address past misconduct. The incident raises questions about the independence of the Cour des Comptes and its ability to effectively scrutinize the actions of the government.
Looking ahead, the French government will need to demonstrate a commitment to fiscal responsibility and structural reforms in order to restore confidence in its economic policies. The Cour des Comptes will continue to play a vital role in monitoring the government’s progress and holding it accountable for its actions. The next key date to watch is the Constitutional Council’s ruling on the 2026 budget, expected on February 19th, which will provide further clarity on the direction of French fiscal policy.
Key Takeaways:
- France’s public deficit decreased to 5.4% of GDP in 2025, but this improvement was largely driven by tax increases.
- The Cour des Comptes has raised concerns about the lack of substantial cuts in public spending.
- The appointment of Philippe Gustin, previously criticized by the Cour des Comptes, to a senior position within the institution has sparked controversy.
- The Constitutional Council’s decision on the 2026 budget will be crucial in shaping France’s fiscal outlook.
What are your thoughts on the French government’s fiscal strategy? Share your comments below and let us understand how you think these developments will impact the French economy.