The Iran war is costing French public finances dearly. According to Les Echos, the government is set to announce a first wave of around €4bn in savings to meet its 2026 deficit target, almost two months after the surprise outbreak of the conflict. The cuts could affect both central-government spending and the social security budget; some sources point to a renewed trim of employer payroll-tax exemptions on wages up to 3 times the minimum wage (SMIC). Budget Minister David Amiel has convened the Public Finance Alert Committee on Tuesday, with parliamentarians, local officials, business and union representatives.

The macro picture has deteriorated. Bercy revised its forecasts on Tuesday: 2026 growth cut by 0.1 point to 0.9 per cent (with activity nearly flat in H2), and inflation raised to 1.9 per cent for the full year — well above the 1.3 per cent baked into the budget. National Assembly Budget rapporteur Philippe Juvin notes that the 2025 deficit estimate moved from 5.4 per cent to 5.1 per cent, with the 2026 budget built on a 5 per cent assumption. The crisis is cutting into tax receipts and inflating unforeseen spending: about €70mn in subsidies has already gone in April to farmers, fishermen and road hauliers, and the Prime Minister is preparing "a new package of aid for May". But the dominant effect is debt-service cost, with the additional bill estimated at around €4bn — driven by inflation-linked bonds becoming more expensive and new issuance happening at higher rates.

The playbook is familiar: in 2025, Bercy froze or cancelled €8bn of central-government appropriations between April and June and curbed health-insurance spending by €1.7bn. Those unpopular calls allowed France to land at 5.1 per cent deficit, better than expected. The government's target is now 5 per cent of GDP this year. Source: Les Echos, 18 April 2026, Sébastien Dumoulin and Stéphane Loignon.