2027 Social Security budget review begins

The examination of the 2027 Social Security budget starts on October 20 at the National Assembly, a critical moment for France's public finances.

Court of Audit warns of "extremely dangerous" situation

The Court of Audit described the Social Security accounts as "extremely dangerous" just before the budget review. It emphasized that the government's planned efforts for 2027 must be continued in the following years.

Social Security deficit widens despite additional revenue

Despite an additional 8.7 billion euros in revenue, the Social Security deficit has grown to 21.8 billion euros. The Court of Auditors warns about the "time bomb of debt" and stresses the need to regain control of public finances.

Deficit exceeds expectations and economic challenges

This year's deficit of 21.8 billion euros is 2.4 billion euros more than the 2026 budget and 200 million euros more than in 2025. The Court attributes this to a deteriorating economic context and overestimated growth forecasts.

Payroll and economic factors contribute to deficit

The Social Security deficit has deepened due to a slower-than-expected increase in the payroll and a drop in the number of employees, leading to reduced social contributions and taxes. Additional factors include the minimum wage increase and lower tobacco tax revenues.

New taxes bring in extra revenue

The 2026 budget brought in 8.7 billion euros more in revenue than 2025, mainly through new taxes. These include increases in old-age contribution rates, the CSG tax, and a tax on mutuals.

Health insurance spending falls short of goals

The Social Security budget supported savings on insured persons, but the national objective for health insurance expenditure was underachieved by 1.1 billion euros. This was partly due to increased flat-rate contributions and medical co-payments.

Demographic factors drive up expenses

The increase in Social Security expenditure, reaching 17.1 billion euros compared to 2025, is mainly due to demographic factors. The Court of Auditors highlights the long-term impact of an aging population on public finances.

Government aims for deficit reduction by 2030

The government proposes reducing the deficit to 12.7 billion euros by 2027, nearly half of this year's deficit. The Court of Auditors sees this as a key step toward balance but warns that the goal is fragile.

Growth forecasts and financial challenges

The government's optimistic growth forecasts for 2027, at 1%, are considered uncertain. The High Council of Public Finances warns that the budget's corrective measures may not be sufficient and that some proposals have already been rejected.

Debates over tax reforms and pension freezes

Key proposals include reducing tax loopholes and freezing pensions above 1,260 euros per month, a measure that has caused political tension. The Court of Auditors urges swift action to control the trajectory of social finances.

Debt transfer to reduce financial risks

The Court of Auditors recommends transferring about 100 billion euros of Social Security debt to the Cades fund to reduce financial risks. This would extend the repayment period but would not reduce the deficit directly.

CRDS tax extension and long-term implications

Transferring the debt would require continuing the CRDS tax beyond 2033, when its repayment is currently expected to end. The Court stresses the need for a credible plan to achieve balance and prevent further debt accumulation.