France Plans 340 Billion Euros of Bond Issuance in 2027 as Debt Service Rises to 72.9 Billion
France’s state financing requirement will rise to 339.7 billion euros in 2027, up 28.0 billion euros from the updated 2026 figure, under the funding plan Agence France Trésor set out ahead of the 2027 budget the government presented on Thursday with a public deficit target of 5.0 percent of GDP. The need will be met by 340.0 billion euros of medium and long term bond issuance, net of buybacks, against 310.0 billion euros in 2026.
Redemptions drive the rise
| Item | 2026 | 2027 |
|---|---|---|
| State financing requirement | €311.7bn | €339.7bn |
| Medium and long term issuance, net of buybacks | €310.0bn | €340.0bn |
| State debt service | €62.6bn | €72.9bn |
2026 is the updated forecast; 2027 is the budget bill.
Redemptions of medium and long term securities rise by 19.4 billion euros as debt issued during the health and energy crises matures, about 69 percent of the 28.0 billion euro increase in the requirement, on our calculation. Market financing also replaces the end of European Recovery and Resilience Facility funding, which stood at 6.1 billion euros in 2026. Debt service rises 10.3 billion euros, or about 16.5 percent, on our calculation, after the 2026 figure was revised to 62.6 billion euros from 59.3 billion in the initial budget. The 2027 plan also expects 8.0 billion euros of discounts at issuance to reflect higher interest rates, and caps the net rise in negotiable state debt of one year or more at 160.5 billion euros.
The market sets the price
The weighted average yield on medium and long term debt issued in 2026 stands at 3.55 percent, against 3.14 percent in 2025. At Thursday’s auction, the agency sold 11.999 billion euros of bonds maturing between 2036 and 2048 at weighted average yields of 4.93 to 5.40 percent, against total bids of 27.487 billion euros, a cover of about 2.29 times on our calculation. Those auction yields were 138 to 185 basis points above the 3.55 percent weighted average across medium and long term issuance so far in 2026, although the comparison spans different maturities. With 85 percent of this year’s programme completed by the end of September, roughly 46.5 billion euros of 2026 issuance remained for the last quarter, or about 34.5 billion euros after Thursday’s sale, on our calculation.
Why it matters: France’s debt service is rising faster than its financing requirement: the requirement grows about 9 percent in 2027 while debt service grows about 16.5 percent, on our calculation, and the agency expects 8.0 billion euros of issuance discounts to reflect higher interest rates on new debt.
Outlook: The detailed 2027 medium and long term financing programme will be released in December 2026.
Sources: Agence France Trésor, French Ministry of Economy and Finance, The Edge.
