BERLIN, Oct 8, 2026 (GM/NET) – Germany’s economy minister on Thursday urged other European countries to maintain sound public finances as worries mount about French debt levels, warning: “There is no free lunch.”
Worries about public spending in France have in recent weeks pushed government borrowing rates to levels unseen since the global financial crisis.
Asked about French public finances, German Economy Minister Katherina Reiche noted that French Finance Minister Roland Lescure was “fighting to create a budget that is constitutional and geared towards the future”.
The French government last week unveiled a 2027 budget bill that envisages spending cuts and tax increases to rein in the budget deficit.
Reiche went on to stress that public debt is “a very important indicator of sound fiscal and financial policy”.
Noting that Germany still enjoyed top-tier debt ratings from major agencies, Reiche added that the “more countries in Europe are at least close to that level, the better”.
She also recognised that Germany’s ramp-up in public spending on defence and infrastructure would cause the country’s debt to balloon and would need to be repaid.
“There is no free lunch,” she added, briefly switching in to English.
“That applies to public finances as well,” she said. “And we know that France is working on this. We also see the major reform efforts being undertaken under difficult political conditions.”
Worries have been mounting in Germany, the eurozone’s biggest economy, about the state of public finances in neighbouring France, the euro area’s number two economy.
Marcel Fratzscher, president of the DIW economic institute, warned of a “vicious circle” in which rising debt and political paralysis weaken confidence in public institutions.
“The result is a weaker economy and a growing risk of recession, causing deficits and debt to increase even further,” he told the Rheinische Post newspaper.
