France

Towards a pre-election period characterised by a wait-and-see attitude, ahead of an election that is more uncertain than ever

In 2026, economic activity continued to slow. The ongoing recovery in aerospace exports only partially offset the slowdown in business investment, against a backdrop of (geo)political uncertainty. Affected by the sharp rise in inflation – driven mainly by energy costs – household consumption remained sluggish. The year 2027 will be largely dominated by the presidential election in April and May, which is likely to be followed by new parliamentary elections. The pre-election period will be characterised by considerable political and fiscal uncertainty, given that the race is wide open and the manifestos of the potential winners are diametrically opposed. Against this backdrop, precautionary saving will remain very high, preventing any significant rebound in household consumption. Despite the easing of inflation, real wage growth is uncertain this time round, given a labour market that is significantly less favourable than in 2022–2023.

Political and fiscal uncertainty will also prompt businesses to adopt a wait-and-see approach. This is more likely given that many of them will enter 2027 in a (very) difficult cash flow situation, having been hit by rising interest rates and, above all, rising input costs in 2026. This wait-and-see approach could affect job creation and investment in the run-up to the election. The rebound in household and business demand will then depend largely on the election result and the easing of political uncertainty. Business failures will continue to rise, having exceeded the 70,000 mark (over 12 months) by the end of June 2026 – almost 50 per cent higher than before the pandemic. Whilst the lack of a stable majority makes it unlikely that significant budgetary measures – and ultimately a reduction in spending – will be passed, public spending is no longer expected to be a driving force in 2027. Weak domestic demand is likely to limit imports; however, substantial flows from China are still expected to continue. On the export front, the pharmaceutical, defence and, above all, aerospace sectors will continue their positive trend. Conversely, most other sectors will remain in difficulty, and their exports will depend in particular on the uncertain recovery of the German economy.

Public finances remain well in the red

The lack of a solid majority since the 2025 general election will continue to prevent any significant consolidation of public finances. As in 2025 and 2026, negotiations are likely to be difficult, and the 2027 budget may be approved late, once the year is already well underway. In any case, the fragmentation of the National Assembly will allow for neither significant spending cuts nor sharp tax rises. In the absence of a 2027 budget, the previous year’s budget will be rolled over. The public deficit will therefore – at best – remain stable at around 5 per cent of GDP. Whoever wins the presidential election and the (highly) likely parliamentary elections, the new government will probably seek to pass an amending budget once in power. Meanwhile, interest payments will continue to rise rapidly in the wake of borrowing costs – now among the highest in the major eurozone economies. Public debt will continue to rise rapidly, eventually exceeding 120 per cent of GDP. Its sustainability will remain one of the key challenges facing the French economy, against a backdrop of political instability and uncertainty, which may not be fully resolved by 2027, despite the important elections scheduled for that year.

The current account deficit is expected to remain moderate in 2027. Exports will continue to be driven by the aerospace, defence and pharmaceutical sectors. Imports will depend largely on oil price trends, which are expected to fall but remain subject to geopolitical developments. The surplus on the services balance (1.5 per cent of GDP) is insufficient to offset the deficit on the goods balance (-1.9 per cent of GDP). The current account deficit is financed by the issuance of debt or listed shares purchased by non-residents. At the end of March 2026, non-residents held more than half of the securities issued by general government (56 per cent), non-financial corporations (63 per cent) and French banks (71 per cent).

Elections in 2027 that are as important as they are too close to call

President Macron, of the centre-liberal Renaissance party, who has been in power since 2017, was re-elected for a second term in April 2022. Although he once again secured victory in the second round against Marine Le Pen of the National Rally (RN, far right), the result was closer this time (58.5%–41.5%, compared with 66%–34% in 2017). In the parliamentary elections that followed two months later, his party won only 170 of the 577 seats in the National Assembly. His alliance with two other centre-right parties had enabled him to secure only 250 seats in total. Lacking a majority, the government was forced to push through budgets and reforms without a vote in the National Assembly, whilst exposing itself to the risk of a possible motion of no confidence. In June 2024, following the RN’s landslide victory in the European elections, President Macron decided to dissolve the National Assembly. The subsequent general election resulted in a National Assembly more fragmented than ever, divided into three blocs; none of which held an absolute majority. The left-wing NFP alliance secured 192 seats (including 72 for the far-left LFI party), the centrist Ensemble coalition 164, and the RN 143. President Macron appointed Michel Barnier (LR, right) as Prime Minister, who was voted out by the National Assembly in December 2024, followed by the centrist François Bayrou, who was voted out in September 2025.

Their successor, Sébastien Lecornu (centrist), quickly resigned in October 2025 due to the deadlock in discussions over the 2026 budget. He was subsequently reappointed to his post and managed to push through a minimalist budget in February 2026, after the deadline. Like his predecessors, he faces the constant threat of a vote of no confidence, and a similar scenario is possible for the 2027 budget.

This political uncertainty will persist – at least – until the presidential election on 18 April, the outcome of which remains undecided. With less than a year to go before the election, whilst all the polls suggest that Marine Le Pen will reach the second round with around 35 per cent of the vote, the identity of the other finalist remains uncertain. Several candidates are approaching or even exceeding the 10 per cent mark: Jean-Luc Mélenchon (LFI), former centre-right Prime Ministers Edouard Philippe and Gabriel Attal, or even one of the candidates who might emerge from a possible primary spanning the left to the centre-left. The outcome is all the more uncertain given that numerous withdrawals are expected among the 23 candidates who had already declared their candidacy by the summer of 2026. Whilst the second round is expected to be extremely close, a victory for the RN cannot be ruled out under any circumstances. A victory for the RN – or for LFI – would constitute an unprecedented upheaval against a backdrop of France’s significant debt exposure to the financial markets. Whatever the outcome of this election, the scenario of the National Assembly being dissolved in its wake and new parliamentary elections being called seems inevitable. However, given the fragmentation and polarisation of the political landscape, there is no guarantee that a stable majority will emerge from these elections. Consequently, the risk of political instability will remain particularly high in the short term and, potentially, in the medium term as well, following the important elections of 2027.

Payment

Bank cards are now the most commonly-used form of payment in France, although cheques are still widely used. In value terms, cheques and transfers are still the most popular forms of payment.

If a cheque remains unpaid for more than 30 days from the date of first presentation, the beneficiary can immediately obtain an enforcement order (without need for further procedures or costs). This is based on a certificate of non-payment provided by the creditor’s bank, following a second unsuccessful attempt to present the cheque for payment and when the debtor has not provided proof of payment within 15 days of receipt of a formal notice to pay served by a bailiff (Article L.131?73 of the Monetary and Financial Code).

Bills of exchange, a much less frequently used payment method, are steadily becoming rarer in terms of number of operations – although they remain important in terms of total value. Bills of exchange are still an attractive solution for companies, as they can be discounted or transferred and therefore provide a valuable source of short-term financing. Moreover, they can be used by creditors to pursue legal proceedings in respect of “exchange law” (droit cambiaire) and are particularly suitable for payment by instalments.

Bank transfers for domestic or international payments can be made via the SWIFT electronic network used by the French banking system. SWIFT offers a reliable platform for fast payments, but requires mutual confidence between suppliers and their customers. France is also part of the SEPA network.

Debt Collection

Unless otherwise stated in the general sales conditions, or agreed between the parties, payment periods are set at thirty days from the date of receipt of goods or performance of services requested. Interest rates and conditions of application must be stipulated in the contract – otherwise the applicable interest rate is that applied by the European Central Bank in its most recent refinancing operations. Throughout the first half of the year in question, the rate applicable is that in force on January 1 and for the second half year in question, the rate applicable is that in force on July 1.

Amicable phase

During this phase, the creditor and the debtor try to reach an amicable solution via direct contact in order to avoid legal procedures. All documents signed between the parties (such as contracts and invoices) are analysed. Where possible, the debtor can be granted an extended time period to pay his debts, with the period’s length negotiated as part of the amicable settlement.

Legal proceedings

Order for payment (injonction de payer)

When a debt claim results from a contractual undertaking and is both liquid and undisputable, creditors can use the injunction-to-pay procedure (injonction de payer). This flexible system uses pre-printed forms and does not require the applicants to argue their case before a civil court (tribunal d’instance) or a competent commercial court (with jurisdiction over the district where the debtor’s registered offices are located). By using this procedure, creditors can rapidly obtain a court order which is then served by a bailiff. The defendant then has a period of one month in which to dispute the case.

Fast-track proceedings

Référé-provision provides creditors with a rapid means of debt collection. If the debtor is neither present nor represented during the hearing, a default judgment can be issued. The court then renders a decision, typically within seven to fourteen days (though same-day decisions are possible). The jurisdiction is limited to debts which cannot be materially contested. If serious questions arise over the extent of the debt, the summary judge has no jurisdiction to render a favourable decision. Judgments can be immediately executed, even if the debtor issues an appeal.

If a claim proves to be litigious, the judge ruled competent to preside (juge des référés) over urgent matters evaluates whether the claim is well-founded. If appropriate, the judge can subsequently decide to declare himself incompetent to rule on the case. Based on his assessment of whether the case is valid, he can then invite the plaintiff to seek a ruling through formal court procedures.

Ordinary proceedings

Formal procedures of this kind enable the validity of a claim to be recognised by the court. This is a relatively lengthy process which can last a year or more, due to the emphasis placed on the adversarial nature of proceedings and the numerous phases involved. These phases include the submission of supporting documents, written submissions from the litigants, the examination of evidence, various recesses for deliberations and, finally, the hearing for oral pleadings (audience de plaidoirie).

Proceedings are issued through a Writ of Summons (Assignation) which is served on the debtor 15 days before the first procedural hearing. During this hearing, the court sets a time period for the exchange of pleadings and discovery. Decisions rendered do not necessarily have the possibility of immediate execution. In order to be executed, they must first be served on the debtor. They are also subject to appeal.

Enforcement of a Legal Decision

Unless the court decision is temporarily enforceable, enforcement can only commence if no appeal is lodged within one month and must occur within ten years of notification of the court’s decision. Compulsory enforcement can be requested if the debtor does not comply with the judgment. Obligations to pay can be enforced through attachment (of bank accounts or assets) or through a third party which owes money to the debtor (garnishment).

France has adopted enforcement mechanisms for decisions rendered by other EU member countries. These mechanisms include the Payment Order under the European Enforcement Order. Decisions rendered by non-EU members can be recognised and enforced, provided that the issuing country is party to a bilateral or multilateral agreement with France. In the absence of an agreement, claimants are obliged to use the French exequatur procedure.

Insolvency Proceedings

French insolvency law provides for six procedures to undertake restructuring or avoid insolvency. These are either assisted proceedings or proceedings controlled by the court.

ASSISTED PROCEEDINGS

These can be either mandated ad hoc or via conciliation proceedings. Both are informal, amicable proceedings, where creditors cannot be forced into a restructuring agreement and the company’s management continues to run the business. These negotiations are governed by contractual law throughout their duration. The proceedings are conducted under the supervision of a court-appointed practitioner (a mandataire ad hoc, or a conciliator) in order to help the debtor reach an agreement with its creditors. Both of these types of proceedings are confidential but conciliation can eventually be made public if the debtor has the approval of the commercial court. Nevertheless, the terms and conditions of agreements remain confidential and can only be disclosed to signatory parties.

COURT-CONTROLLED PROCEEDINGS

The four types of court-controlled proceedings are judicial reorganisation, judicial liquidation, sauvegarde, and Accelerated Financial Sauvegarde proceedings (AFS).

In all four proceedings, any pre-filed claims are automatically stayed. Creditors must file proof of their claims within two months of publication of the opening judgment, or four months for creditors located outside France. Debts which arise after proceedings commence are given priority over debts incurred beforehand. Certain types of transactions can be set aside by the court, if they were entered into by the debtor during a hardening period (before a judgment opening a judicial reorganisation or a judicial liquidation).

With Court-Controlled proceedings there can be variations in the extent of involvement of the court-appointed conciliator. The sauvegarde and AFS procedures are debtor-in-possession proceedings, but with judicial reorganisation, the court can decide whether to set aside the company’s managers. The role of management is particularly reduced in cases of judicial liquidation, as the debtor company usually ceases to conduct business. Nevertheless, the court can decide for a business to continue operating under a court-appointed liquidator.

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Last updated: July 2026