II Institutional Intelligence
Natixis · Hadrien CAMATTE · 08/28/2026

France remains the Euro area's runner-up for public spending

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Marketing communication: This document is a marketing presentation. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research; and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. 28 August 2026 EMEA M ACRO I NSIGHTS France remains the Euro area's runner-up for public spending In 2025, France had the second largest public spending in the euro area after Finland, at 57.3% of GDP. While the gap with Germany continues to narrow due to rising German public spending, it remains relatively stable compared to Spain and the Euro area. A deep dive into the COFOG (Classification of the Functions of Government) data breakdown between 2000 and 2024 (the latest available year) reveals public spending has surged across european countries, fueled primarily by rising healthcare and social protection spending. Yet, the pace differs widely: social protection spending rose by just +0.5 percentage points (p.p.) in Germany and +2.8 p.p. in France, compared to a steeper +4.5 p.p. in Italy and a massive +6.0 p.p. in Spain. In particular, France's pension spend (13.4% of GDP in 2024) remains the primary driver of its social protection expenditure gap relative to peers. Indeed, as of 2024, France records the fourth-highest pension spending in the Euro area, behind only Finland, Austria, and Italy. The burden of public spending — specifically social security — will undoubtedly take centre stage in the French presidential campaign. This was already evident during the first candidate debate at the Medef summer conference on August 26, 2026 (see French Politics: Post-Card from REF ). WRITTEN BY Hadrien CAMATTE Tel. +33 1 58 55 39 43 hadrien.camatte@natixis.com Théa BARTOLETTI thea.bartoletti@natixis.com Discover more on our Website EMEA M ACRO I NSIGHTS 2 Euro area public spending: France maintains second- highest ranking in 2025 France’s public deficit landed at -5.1% of GDP in 2025 ( Chart 1 ), down from -5.8% in 2024. Despite this marginal recovery, the French deficit remains the highest in the Euro area, bar Belgium's at -5.2%. Measured as a share of GDP, France recorded the second-highest public spending in the euro area in 2025 ( Chart 2 ), trailing only Finland, at 57.3% of GDP — a level close to those observed pre-COVID. Chart 1: Public deficit (% of GDP) Chart 2: Public spending (% of GDP) 00 02 04 06 08 10 12 14 16 18 20 22 24 35 40 45 50 55 60 65 Euro area Germany Spain France Italy Source: Eurostat, Natixis CIB Source: Eurostat, Natixis CIB The spending gap with Germany has narrowed since 2014 ( Chart 3 ) while widening against Italy: ► Germany’s spending shifts structurally higher: Public expenditure averaged 46.0% of GDP over the 2000 – 2018 period, rising to 49.4% in 2024 and 50.5% in 2025. ► Conversely, after peaking at 56.7% in 2020, Italian public spending as a share of GDP gradually declined, returning close to pre-pandemic levels (which averaged 48.5% of GDP) to reach 50.4% in 2024, before edging back up to 51.2% in 2025 . 00 02 04 06 08 10 12 14 16 18 20 22 24 -14 -12 -10 -8 -6 -4 -2 0 2 4 Euro area Germany Spain France Italy EMEA M ACRO I NSIGHTS 3 Chart 3: France's surplus public spending (points of GDP) Chart 4: Breakdown of the public spending gap (2000 – 2024) (points of GDP) 00 02 04 06 08 10 12 14 16 18 20 22 24 0 2 4 6 8 10 12 14 16 18 Euro area Germany Spain Italy Source: Eurostat, Natixis CIB Reading note: France’s public spending was 6.7 percentage points of GDP higher than Germany’s in 2025 Source: Eurostat, Natixis CIB A continuous rise since 2000, driven by welfare spending Using Eurostat COFOG (Classification of the Functions of Government) data (public spending breakdown by function available until 2024), the change in expenditures between 2000 and 2024 reflect ( Chart 4 ): ► Public spending rose across all sovereign peers: Total outlays increased in Germany (+1.4 pp of GDP), Spain (+6.4 pp), France (+4.3 pp) and Italy (+4.0 pp) . ► This expansion was overwhelmingly driven by social protection and healthcare 1 : Specifically, social protection outlays grew by +0.5 pp in Germany, +6.0 pp in Spain, +2.8 pp in France and +4.5 pp in Italy. ► France and Germany increased their defence and public safety spending by 0.3 pp of GDP over the period. ► France and Italy trimmed general public services outlays 2 , though these cuts were insufficient to offset rising costs in other sectors. Between 2023 and 2024 (latest available data), the +0.2 pp of GDP increase in public expenditure was primarily driven by social protection, while spending on economic affairs declined ( Chart 5 ) 3 . 1 Healthcare expenditure comprises medical products, hospital services, public health services, and health-related R&D, whilst social security outlays encompass pensions, sickness and disability benefits, unemployment benefits, housing support, and family allowances. 2 General public services encompass the overall administrative and operational costs of the state, including civil service payroll, public debt interest payments, and the institutional running costs of government bodies." 3 The 'economic affairs' category encompasses, among other sectors, communication, energy, mining and manufacturing, and transport. EMEA M ACRO I NSIGHTS 4 Chart 5: Breakdown of the change in public spending between 2023 and 2024 (percentage points of GDP) Source: Eurostat, Natixis CIB How have spending gaps between countries evolved between 2023 and 2024? Welfare spending remains the primary driver of divergence The COFOG breakdown by function – available only until 2024 - ( Chart 10 , in the Appendix) confirms that healthcare and social security remains the primary contributors to France's spending premium in 2024 4 . This aligns with our 2023 analysis (see our report France, second highest public spendings in the euro area: where do the differences with the others come from? ). Between 2023 and 2024, France’s spending gaps with the Euro area and Spain remained virtually unchanged (+0.1 pp of GDP). Conversely, the gap with Germany narrowed from 8.6 pp to 7.5 pp, driven by a sharp rise in German outlays (+1.3 pp of GDP versus +0.2 pp for France). Meanwhile, the gap with Italy widened significantly from +3.3 pp to +6.6 pp, reflecting a steep decline in Italian public spending (-3.5 pp over the year) ( Chart 3 ). France’s premium in healthcare ( Chart 6 ) and social protection ( Chart 7 ) is highly structural: since 2000, France has consistently outspent all peer economies in these categories. ► The shift in the German healthcare curve reflects a sharper spending increase between 2023 and 2024 (+0.2 pp for Germany versus +0.1 pp for France). ► The narrowing social protection gap with Germany and the wider euro area stems from a rise in their expenditures (+0.9 pp of GDP for Germany and +0.5 pp on average for the euro area). Germany was severely hit by the 2022 – 2023 energy crisis, resulting in contraction (GDP growth at -0.9% in 2023 and -0.5% in 2024) and high inflation (averaging 5.9% in 2023 and 2.3% in 2024). 4 However, certain disparities warrant qualification. The scope of public spending varies across countries, particularly regarding the public sector's coverage of healthcare and pension benefits. For instance, French healthcare expenditure includes a substantial portion of personal care and hospital services. Conversely, a significant share of these services is funded by private insurance companies in Germany. +0.2 point EMEA M ACRO I NSIGHTS 5 Consequently, nominal wages rose sharply. This automatically fed into pension payouts, driving up social protection expenditure. Chart 6: Evolution of France's surplus health spending (points of GDP) Chart 7: Evolution of France's surplus social protection spending ( points of GDP) Source: Eurostat, Natixis CIB Source: Eurostat, Natixis CIB Pension spending remains structurally higher, driving the social security expenditure gap A breakdown of social security expenditure reveals that pension spending is the primary driver of this gap (see Appendix, Chart 11 ). In 2024, France spent an additional 2.5 percentage points of GDP compared to the euro area average. Only Italy spends more on pensions than France (+0.6 percentage points of GDP), owing to its older demographic profile ( Chart 9 ). Indeed, Italy’s dependency ratio (the population aged over 65 relative to those aged 15 to 64) is projected to be the highest in the European Union in 2025, at 39%. This pension spending premium is also structural ( Chart 8 ), as France has consistently outspent its peers (excluding Italy) since 2000. Over the 2010 – 2024 period, pension expenditure averaged 13.4% of GDP in France, compared to 10.7% in the Eurozone and 9.3% in Germany. 00 02 04 06 08 10 12 14 16 18 20 22 24 0 0.5 1 1.5 2 2.5 3 Euro area Germany Spain Italy 00 02 04 06 08 10 12 14 16 18 20 22 24 0 1 2 3 4 5 6 7 8 9 10 Euro area Germany Spain Italy EMEA M ACRO I NSIGHTS 6 Chart 8: Evolution of the France's surplus pension spending gap (percentage points of GDP) Chart 9: Evolution of the dependency ratio (population aged over 65 relative to the 15 – 64 age group) Source: Eurostat, Natixis CIB Source: Eurostat, Natixis CIB Conclusion France's public spending as a share of GDP remains structurally higher than that of almost all other Eurozone countries, a trend once again confirmed in 2024 and 2025. Specifically, France stands out due to: ► A high public deficit: The deficit stood at -5.1% of GDP in 2025, following -5.8% in 2024. In 2025, it was the second highest in the Eurozone, just behind Belgium (-5.2%). While the government has targeted a public deficit of 5.0% for 2026, this goal remains ambitious. Achieving it will be challenging given the downward growth revisions triggered by the war in the Middle East and the rapid rise in debt-servicing costs (see France’s Rising Public Debt: The Bill Comes Due ). ► The sheer weight of social spending: Our analysis of spending by category based on 2024 COFOG data reveals that healthcare and social protection are the primary drivers of the public expenditure gap between France and other major European economies. Accounting for 13.4% of GDP in 2024, pension expenditures represent the largest component of French social protection. They stand out as a key contributor to the country’s high public spending, a phenomenon that is particularly striking given that France’s demographic profile is more favorable than that of most of its European peers. Undoubtedly, the fiscal burden of public expenditure — and of the social security system in particular — will take center stage in the upcoming French presidential election. This was already evident during the first debate between the candidates at the Medef summer university on August 27, 2026 (see French Politics: Post-Card from REF ). 00 02 04 06 08 10 12 14 16 18 20 22 24 -1 0 1 2 3 4 5 6 7 Euro area Germany Spain Italy 00 02 04 06 08 10 12 14 16 18 20 22 24 20 22 24 26 28 30 32 34 36 38 40 Germany Spain France Italy EMEA M ACRO I NSIGHTS 7 Appendix Chart 10: Breakdown of the public spending gap relative to France in 2024 (percentage points of GDP) France – Euro area: gap of 7.6 points France – Germany: gap of 7.5 points France – Spain: gap of 11.5 points France – Italy: gap of 6.6 points Source: Eurostat, Natixis CIB EMEA M ACRO I NSIGHTS 8 Chart 11: Breakdown of the social security expenditure gap relative to France in 2024 (percentage points of GDP) France – Euro area: gap of 3.5 points France – Germany: gap of 3.2 points France – Spain: gap of 4.9points France – Italy: gap of 2.4 points Source: Eurostat, Natixis CIB EMEA M ACRO I NSIGHTS 9 Head of CIB Research Head of Macro & Financial Institutions Research Jean-François ROBIN Nathalie DEZEURE +33 1 58 55 13 09 +33 1 58 55 99 93 jean-francois.robin@natixis.com nathalie.dezeure@natixis.com Head of Europe Macro research Financial Institutions Alain DURRE, Ph.D. Bouchra RHAJBAL +33 1 58 55 60 49 +33 1 58 55 79 93 alain.durre@natixis.com bouchra.rhajbal@natixis.com France, Belgium, Euro Area Germany, Euro Area Covered Bonds Hadrien CAMATTE Bastien AILLET Jennifer LEVY +33 1 58 55 39 43 +49 699 715 3358 +33 1 58 55 05 81 hadrien.camatte@natixis.com bastien.aillet@natixis.com jennifer.levy@natixis.com Spain, Italy, Greece, Portugal, Euro Area Inflation, Macro modeling, Euro Area Jesus CASTILLO Patricia FLOREZ CABRA +33 1 58 55 99 90 +33 1 58 55 62 71 jesus.castillo@natixis.com patricia.florezcabra@natixis.com CEMEA UK, Nordics, Real Estate Inna MUFTEEVA, CFA Sylwia HUBAR , Ph.D. +33 1 58 55 52 04 +33 1 58 55 35 59 inna.mufteeva@natixis.com sylwia.hubar@natixis.com Assistant Economists Théa BARTOLETTI Rita BEJJANI Leslie HUYNH thea.bartoletti@natixis.com rita.bejjani@natixis.com leslie.huynh@natixis.com Data base Ludovic DUCROCQ Camille CREUZE Eric RABARISON +33 1 58 55 14 76 +33 1 58 55 99 92 +33 1 58 55 12 65 ludovic.ducrocq@natixis.com camille.creuze@natixis.com eric.rabarison@natixis.com Andriat RAKOTOVAO +33 1 58 55 14 92 andriatsaramiafara.rakotovao @natixis.com
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The information on the following pages is provided for information purposes only and does not constitute investment, legal, tax or other advice or any recommendation to buy, sell or otherwise transact in any of the funds or securities mentioned. Prospective investors should take appropriate professional advice before making any investment decision. Bolivia : Natixis is not authorized to conduct in Bolivia activities reserved by law for financial intermediation entities and/or brokerage firms. The products/services offered will be provided from Natixis's offices outside of Bolivia. Chile : This communication and any accompanying information (the "Materials") are intended solely for informational purposes and do not constitute (and should not be interpreted to constitute) the selling, or conducting of business with respect to such products or services in Chile (this "Jurisdiction"), or the conducting of any brokerage, banking or other similarly regulated activities in this Jurisdiction. Natixis ("Bank") is not registered (or intended to be registered) in this Jurisdiction. The Materials are private, confidential and are sent by the Bank only for the exclusive use of the addressee. The Materials must not be publicly distributed and any use of the Materials by anyone other than the addressee is not authorized. The addressee is required to comply with all applicable laws in this Jurisdiction, including, without limitation, tax laws and exchange control regulations, if any. The services do not include the offer or intermediation of any securities. Additionally, the Bank will not be liable for investment decisions made by the client based on the information derived or obtain from the Bank's materials. UK : In the UK, Natixis SA is authorised by L'Autorité de contrôle prudentiel et de resolution (ACPR), supervised by the European Central Bank (ECB) and regulated by the Autorité des Marchés Financiers (AMF), Authorised by the Prudential Regulation Authority. Subject to regulation by the Financial Conduct Authority and limited regulation by the Prudential Regulation Authority. Details about the extent of our regulation by the Prudential Regulation Authority are available from us on request. Germany : Natixis Zweigniederlassung Deutschland is subject to a limited form of regulation by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) with regards to the conduct of its business in Germany under the right of establishment there. The transfer / distribution of this document in Germany is performed by / under the responsibility of Natixis Zweigniederlassung Deutschland. Spain: Natixis is regulated by Bank of Spain and the CNMV (Comisión Nacional del Mercado de Valores) for the conduct of its business under the right of establishment in Spain. Italy: Natixis is regulated by Bank of Italy and the CONSOB (Commissione Nazionale per le Società e la Borsa) for the conduct of its business under the right of establishment in Italy. Japan: Natixis Tokyo Branch is authorized in Japan by the Financial Service Agency as a Bank. Natixis Japan Securities Co., Ltd. (NJS) is a Financial Instruments Business Operator (Director General of Kanto Local Finance Bureau (Kinsho) No. 2527 and a Money Lender (Tokyo Governor (4) No. 31548), supervised by the Financial Services Agency. NJS is a member of the Japan Securities Dealers Association and Type II Financial Instruments Firms Association. This document is intended solely for distribution to Professional Investors as defined in Article 2.31 of the Financial Instruments and Exchange Act. Hong Kong: In Hong Kong, Natixis is regulated by the Hong Kong Monetary Authority and registered with the Securities and Futures Commission (the “SFC”) to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts) and Type 6 (advising on Corporate Finance) regulated activities under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong) (“SFO”). This document has not been approved by the SFC nor has a copy of this document been registered by the Registrar of Companies in Hong Kong, unless specified otherwise. The investments contained herein may or may not be authorised by the SFC. You are advised to exercise caution in relation to the investments contained herein. If you are in any doubt about any of the contents of this document, you should obtain independent professional advice. The investments may not be offered or sold in Hong Kong, by means of any document, other than (i) to “professional investors” as defined in the SFO and any rules made under the SFO, or (ii) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32 of the Laws of Hong Kong)(the “C(WUMP)O”) or which do not constitute an offer to the public within the meaning of the C(WUMP)O. No person shall issue or possess for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the investments, which to his knowledge is or contains an invitation to the public of Hong Kong (except if permitted to do so under the applicable laws and rules of Hong Kong) other than with respect to investments which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made under the SFO. This document is not and should not be construed as Natixis (or any affiliate or anyone else) offering or holding itself out as being willing or able to provide any service or to carry on any activity which it is not licensed to provide or carry on in Hong Kong. Natixis Asia Limited is registered with the Securities and Futures Commission to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 5 (advising on futures contracts) regulated activities under the Securities and Futures Ordinance. Singapore: Natixis Singapore branch is regulated by the Monetary Authority of Singapore. If this document is distributed in Singapore, this document is intended solely for distribution to Institutional Investors, Accredited Investors and Expert Investors as defined in Section 4A of the Securities and Futures Act 2001 of Singapore. People’s Republic of China: In Mainland China, Natixis Shanghai branch and Natixis Beijing branch are regulated in the People’s Republic of China (the “PRC”, which, for such purposes, does not include the Hong Kong or Macau Specifical Administrative Regions or Taiwan) by National Financial Regulatory Administration, the People’s Bank of China, and the State Administration of Foreign Exchange for the engagement of banking business. This document is intended solely for distribution to investors of the PRC who are qualified/authorized under the laws of the People’s Republic of China to engage in the purchase of Product of the type being offered or sold. PRC investors are responsible for verifying their eligibility to purchase the Product, obtaining all relevant approvals/licenses, verification and/or registrations themselves from relevant governmental authorities, and complying with all relevant applicable regulatory requirements under the PRC legal regime, including, but not limited to, all relevant foreign exchange regulations and/or outbound investment regulations. Taiwan: In Taiwan, Natixis Taipei Branch is authorized by the Financial Supervisory Commission as a commercial bank and is subject to its supervision. The Product may not be sold or offered to Taiwan resident investors or in Taiwan unless they are made available, (i) outside Taiwan for purchase by such investors outside Taiwan and/or (ii) investors are authorized to engage in the purchase of product in accordance with applicable laws. South Korea: In Korea, Natixis Asia Limited Seoul Branch is registered as a licensed financial investment business entity under the Financial Investment Services and Capital Markets Act (“FSCMA”) and regulated by the Financial Supervisory Services and Financial Services Commission. This document/communication is distributed by Natixis Asia Limited Seoul Branch in the republic of Korea to Professional Investor only and is not intended for investors in Korea who are not Professional Investor within the meaning of the Article 9(5) of the FSCMA and should not be passed on to any such persons. Some products or transactions described in this document/communication may not be authorized in Korea and may not be available to Korean investors. This document/communication is being provided in accordance with procedures required under applicable laws and regulations as well as internal control standards of Natixis Asia Limited, Seoul Branch. India, Indonesia, and Thailand: Natixis has set-up representative offices in India, Indonesia and Thailand. The activities of the representative offices are supervised by the Reserve Bank of India, the Otoritas Jasa Keuangan (Financial Services Authority) and the Bank of Thailand respectively. Australia: Natixis Asia Limited is registered with the Securities and Futures Commission to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 5 (advising on futures contracts) regulated activities under the SFO. If this document is distributed in Hong Kong, this document is only to Professional Investors as defined in the SFO of Hong Kong and any rules made under the SFO. In Australia, Natixis has a wholly owned subsidiary, Natixis Australia Pty Limited ("NAPL"). NAPL is registered with the Australian Securities and Investments Commission and holds an Australian Financial Services License (No. 317114) which enables NAPL to conduct its financial services business in Australia with "wholesale" clients. Details of the AFSL are available upon request Natixis S.A. is not an Authorised Deposit-Taking Institution under the Australian Banking Act 1959, nor is it regulated by the Australian Prudential Regulation Authority. Any references made to banking in the document refer to Natixis activities outside of Australia. United Arab Emirates: Natixis is authorized by the ACPR and regulated by the Dubai Financial Services Authority (DFSA) for the conduct of its business in and from the Dubai International Financial Centre (DIFC). The document is being made available to the recipient with the understanding that it meets the DFSA definition of a Market Counterparty or Professional Client; the recipient is otherwise required to inform Natixis if this is not the case and return the document. In accordance with the Decision No (13/R.M) of 2021 on the Financial Activities Rulebook and Mechanisms of Adjustment of the Securities and Commodities Authority (SCA) (the SCA Rulebook), the products to which this document relates may only be promoted in the UAE (excluding the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM)) as follows: (i) to a person who meets the definition of a “professional investor” under the SCA Rulebook; or (ii) following a ‘reverse’ (i.e., unsolicited) enquiry by an investor. Further, this document does not constitute a public offer of securities in the United Arab Emirates (including the DIFC and the ADGM) and is not intended to be a public offer. The SCA has not verified this document or other documents in connection with the products. Accordingly, the SCA has not approved this document or any other associated documents nor taken any steps to verify the information set out in this document. The SCA may not be held liable for the accuracy or completeness of the information in this document. The products to which this document relates may be illiquid or subject to restrictions on their resale. Prospective investors should conduct their own due diligence on the products. If you do not understand the contents of this document you should consult an authorised financial advisor. The recipient also acknowledges and understands that neither the document nor its contents have been approved, licensed by or registered with any regulatory body or governmental agency in the GCC or Lebanon. Oman: In Oman, Natixis neither has a registered business presence nor a representative office and does not undertake banking business or provide financial services in Oman. Consequently, Natixis is not regulated by either the Central Bank of Oman or Oman’s Financial Services Authority. This document has been prepared by Natixis. The information contained in this document is for discussion purposes only and neither constitutes an offer of securities in Oman as contemplated by the Commercial Companies Law of Oman (Royal Decree 18/2019) or the Securities Law (Royal Decree 46/2022), nor does it constitute an offer to sell, or the solicitation of any offer to buy non-Omani securities in Oman as contemplated by Article 139 of the Executive Regulations to the Capital Market Law (issued vide CMA Decision 1/2009). Additionally, this document is not intended to lead to the conclusion of a contract for the sale or purchase of securities. Natixis does not solicit business in Oman and the only circumstances in which Natixis sends information or material describing financial products or financial services to recipients in Oman, is where such information or material has been requested from Natixis and by receiving this document, the person or entity to whom it has been dispatched by Natixis understands, acknowledges and agrees that this document has not been approved by the CBO, the FSA or any other regulatory body or authority in Oman. Natixis does not market, offer, sell or distribute any financial or investment products or services in Oman and no subscription to any securities, products or financial services may or will be consummated within Oman. This document has not been approved by the FSA or any other regulatory body or authority in Oman, and no authorization, licence or approval has been received by Natixis from the FSA or any other regulatory authority in Oman, to market, offer, sell, or distribute the securities within Oman. Natixis does not advise persons or entities resident or based in Oman as to the appropriateness of investing in or purchasing or selling securities or other financial products. Nothing contained in this document is intended to constitute Omani investment, legal, tax, accounting or other professional advice. The recipient of this communication represents that it is a financial institution and/or is a sophisticated investor (as described in Article 139 of the Executive Regulations of the Capital Market Law) and that its officers/employees have such experience in business and financial matters that they are capable of evaluating the merits and risks of investments. Qatar: The investments described in this document have not been, and will not be, offered, sold or delivered at any time, directly or indirectly, in the State of Qatar in a manner that would constitute a public offering. This document has not been, and will not be, filed with, reviewed by or approved by the Qatar Central Bank, the Qatar Financial Markets Authority or any other relevant Qatari authority. This document is intended for the original recipient only and should not be provided to any other person. It is not for general circulation in the State of Qatar and should not be reproduced or used for any other purpose. Saudi Arabia: Natixis Saudi Arabia Investment Company, licensed and regulated by the Capital Market Authority (Number: 19205-31), located in Alfaisaliah Tower, 16th Floor, King Fahad Road, Riyadh – KSA. Turkey: Natixis is not licensed in Turkey to perform any banking/capital market activity. No information in this document is provided for the purpose of offering, marketing and sale by any means of any capital market instruments in the Republic of Turkey. Therefore, this document may not be considered as an offer made or to be made to residents of the Republic of Turkey. Accordingly, neither this document nor any other material may be utilized in connection with any offering to the public within the Republic of Turkey without the prior approval of the Turkish Capital Markets Board. However, according to Article 15 (d) (ii) of the Decree No. 32 there is no restriction on the purchase or sale of products in this document by residents of the Republic of Turkey, provided that: they purchase or sell such products in the financial markets outside of the Republic of Turkey; and such sale and purchase is made through banks, and/or licensed brokerage firms in the Republic of Turkey. Links from or to web sites outside Natixis sites are meant for convenience only. Natixis does not review, endorse, approve or control, and is not responsible for any sites linked from or to Natixis sites, the content of those sites, the third parties named therein, or their products and services. Linking to any other site is at your sole risk and Natixis will not be responsible or liable for any damages in connection with linking. No endorsement or approval of any third parties or their advice, opinions, information, products or services is expressed or implied by these materials.
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AI analysis
AI-generated from the report above · not a translation and not the institution's wording · verify against the official source
Key arguments
  • France's public spending as a share of GDP was 57.3% in 2025, ranking second in the euro area behind Finland.
  • Healthcare and social protection are the primary drivers of France's spending gap relative to peers.
  • Pension spending, at 13.4% of GDP in 2024, is the largest component of social protection and a key structural factor.
  • The public deficit improved to -5.1% of GDP in 2025 from -5.8% in 2024, but remains the second highest in the euro area.
  • The gap with Germany narrowed to 7.5 points of GDP in 2024, driven by a sharp rise in German spending.
  • Fiscal burden and social security will be central in the upcoming French presidential campaign.
Risks
  • Downward growth revisions due to the war in the Middle East may make the 2026 deficit target of 5.0% harder to achieve.
  • Rapid rise in debt-servicing costs could increase fiscal pressure.
  • Structural pension spending may remain high despite an aging population.