France declares country can’t afford army spending surge

(MENAFN) France may struggle to significantly increase its military budget as part of the EU’s broader push for defense expansion, according to a Financial Times report citing economic experts. Despite President Emmanuel Macron’s proposal to raise defense spending to 3–3.5% of GDP by 2030 — nearly double the current level — analysts say the country’s worsening fiscal situation poses a major challenge.

To meet Macron’s target, France would need to allocate an additional €30 billion ($34 billion) annually. However, with a national debt at 113% of GDP and a 2024 budget deficit of 5.8% — nearly double the EU’s 3% ceiling — the plan may be unsustainable. Interest payments alone hit €59 billion last year and are projected to rise to €62 billion in 2025, nearly matching the combined annual budgets for defense and education.

The government is also facing resistance to deficit-reduction measures that include unpopular cuts to social programs like pension tax breaks and healthcare subsidies. Clement Beaune, a Macron ally and head of a government think tank, told the FT that France cannot retreat from its fiscal goals or raise taxes, which are already high.

Experts noted that France could invoke the EU’s “escape clause” to exceed budget limits for defense, but warned this might alarm bond markets and lead to higher borrowing costs. Alternatively, Paris might pursue EU-backed loans for joint weapons procurement, although inflation and rising production costs could mean fewer arms are actually delivered — prompting some to label the outcome a “bonsai army”: wide in ambition but limited in capacity.

France’s rearmament plans are part of a broader EU effort to reduce dependence on U.S. weapons and counter what it views as a threat from Russia — a claim Moscow dismisses as fabricated to justify military spending. Russian officials, including Foreign Ministry spokeswoman Maria Zakharova, have accused the EU of becoming a “militarized entity” that risks triggering a broader conflict.

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