Politics · France · 11 hrs ago
Economists warn against broad French spending cuts during slowdown
Economists Jérôme Creel and Jonas Kaiser warn against broad austerity in France, arguing that the timing and design of budget cuts matter.
France faces persistent deficits, rising debt and higher interest costs, while investors are demanding a wider gap between French and German borrowing rates.
The authors say past deficits did not clearly boost the economy, but that does not mean cutting them would be painless.
Deficits can rise because the economy is weak, or because governments choose to cut taxes or fund programmes.
Some spending can support recovery or develop future industries, while poorly timed measures may fuel inflation or support declining sectors.
Cuts during a slowdown could deepen the economic cost, especially as unemployment rises.
The authors argue that France needs to consider the effects of budget decisions, not just whether they meet European rules.
Economists Jérôme Creel and Jonas Kaiser warn that indiscriminate spending cuts during an economic slowdown and rising unemployment could be particularly costly.
They argue that the effects of deficits depend on when and how they arise, so past deficits’ limited economic impact does not mean cuts will be painless.
France faces prolonged deficits, rising debt and higher interest costs as interest rates increase.
The economists say fiscal decisions can either stabilise the economy after a recession or support future-oriented sectors, but can also contribute to inflation or sustain declining industries.
- Who
- Economists Jérôme Creel and Jonas Kaiser.
- What
- They warn against indiscriminate austerity during an economic slowdown.
- When
- The article was published on November 4, 2026.
- Where
- France.
- Why
- They say broad cuts could be particularly costly when economic activity is slowing and unemployment is rising.
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- Economists
- Jérôme Creel and Jonas Kaiser
- Outlet
- Le Monde
- Publication date
- November 4, 2026
- Economic conditions
- Activity slowing and unemployment rising
- French public finances
- Prolonged deficits and rising debt
What people are saying
Indiscriminate austerity, applied when activity is slowing and unemployment is rising, could be particularly costly.
The effects of deficits depend on when and how they arise.