France Targets Social Deficit Cut to €12.7 Billion by 2027
France Targets Social Deficit Cut to €12.7 Billion by 2027
France’s government has unveiled a fiscal plan aimed at reducing the national social security deficit to 12.7 billion euros by 2027. The proposal, currently under Senate review, relies on significant reforms to pension indexing and healthcare expenditure controls to achieve the targeted savings.
The French government has presented a legislative trajectory designed to reduce the social security deficit from 21.8 billion euros in 2026 to 12.7 billion euros by 2027. Minister of Solidarity and Health Sébastien Lecornu outlined the plan, known as the PLFSS 2027, which is currently being examined by the Senate after its rejection by the National Assembly during first reading.
The strategy prioritizes savings in pensions and healthcare. For retirement benefits, the government proposes de-indexing pensions to inflation starting in 2028, with an exemption for those earning less than 1,260 euros monthly. This measure is projected to generate 4.1 billion euros in savings. Additionally, the removal of a 10% tax allowance on pension income would yield an additional 1.4 billion euros in 2027.
These adjustments are estimated to impact retirees' budgets by approximately 5.5 billion euros. The Council for the Orientation of Pensions (COR) has warned of recession risks associated with de-indexation, while the National Institute of Statistics and Economic Studies (Insee) noted that the 2024 pension revaluation did not directly support economic growth.
In healthcare, the spending cap (Ondam) would increase by only 2% in 2027, against a projected spontaneous rise of 4%, avoiding 5 billion euros in additional costs. The government also plans to transfer 1.2 billion euros of reimbursements to private insurers, potentially affecting two to three million people without complementary coverage.
Further measures include raising the medical franchise cap to 140 euros and increasing taxes on work accident daily allowances and long-term illness benefits. These changes come as sickness absences cost 17.9 billion euros in 2025.
S.Cardona--BT
