Budget 2027: the growth the government promised isn't showing up, and the bill might be bigger

According to Le Monde, the government was banking on growth of 0.5% in 2026, then 1% in 2027. After the contraction recorded in the third quarter, economists consider these targets unlikely, with a high risk of the deficit slipping off course. The paper's headline also points to expensive oil and borrowing costs at record levels. The detail of the figures, the alternative forecasts and the measures under consideration does not appear in the dispatch we have: we will not invent them.

What follows, then, is our reading, not an established finding.

First, a point of method. A budget rests on a growth assumption the way a house of cards rests on a wobbly table: everything else depends on it, tax revenue included. If activity stalls, receipts dwindle, the deficit widens mechanically, and we discover that "fiscal responsibility" was first and foremost an act of faith. Market commentary loves to say that "the economy is hesitating" or that "markets are worried"; the economy is not hesitating. What is happening is that companies are not investing for want of profitable outlets, and creditors are demanding a better rent on their money.

For that is the other side of the story. Record borrowing costs mean a growing share of public revenue will go to holders of government debt rather than to hospitals, schools or the pay of public employees. Debt service is a transfer, organised by the state, from taxpayers to those with savings to place. The former are mostly employees; the latter, far fewer in number.

Expensive oil adds another layer: higher production and transport costs, which firms pass on to prices or absorb in their margins, with wages as the most convenient adjustment variable. Here too the shock is described as "external", which conveniently spares us from asking who, at the end of the chain, ends up paying for it.

If one follows the Marxist analysis of crises, the sluggishness of growth is not merely a cyclical accident: it may reflect a deeper difficulty in making capital profitable, a difficulty each crisis resolves by pushing costs downward. The state, in this scheme, is not a neutral referee. It enjoys a relative autonomy, certainly, but its room for manoeuvre is bounded by the need not to disrupt accumulation. Hence a predictable reflex: when the deficit slips, we talk of austerity, and rarely of taxing capital or large fortunes.

What remains to be seen is which corrective measures the government will propose, and which spending they will hit. That is where one will read who pays, not in the GDP curve. We will come back to it as soon as the trade-offs are known.