27 September 2017: French State funding for 2018 and situation in 2017

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1. This morning, the Cabinet adopted the French Budget Bill for 2018. The total financing requirement will stand at €203.3bn, including €82.9bn to cover the deficit to be financed, €120.1bn to redeem medium- and long-term debt maturing in 2018 and €0.3bn for other cash requirements.

2. The financing requirement in 2018 will be met by (i) the medium- and long-term issuance programme, net of buybacks, worth €195bn (ii) resources from the active management of government shareholdings and earmarked for debt reduction for €1bn (iii) a change in correspondents’ deposits for €1bn (iv) a contribution from cash available in the Treasury’s account of €2.8bn and lastly (v) other cash sources of €3.5bn.

3. State debt service is expected to stand at €41.2bn.

4. The detailed financing programme for 2018 will be released in December.


5. Since the beginning of 2017, France has continued to benefit from extremely favourable financing terms. The weighted average yield on medium- and long-term debt securities stood at 0.67% for the first three quarters of the year, compared to a historic low of 0.37% in 2016, and an average of 2.17% from 2009 to 2014 .

6.The deficit to be financed in 2017 has been revised upwards to €76.5bn, compared to the amount of €69.3bn expected in the 2017 initial Budget Act (LFI) passed in December 2016. The public deficit under the Maastricht Treaty definition for all general government subsectors is expected to reach 2.9% of GDP .

7. The increase in the deficit is funded by an increase in BTFs outstanding of €3.8bn at the 2017 year-end and other cash sources increased to €6.5bn compared to €4.5bn in the initial Budget Act, including the recording of net treasury premiums in 2017 yet again due to a favourable context of low yields. These premiums were slightly higher than provided for in the initial Budget Act but remain much lower than in 2015 and 2016 in an environment of sustained low yields and a gradual renewal of benchmark bonds.

8. For 2017, issuance of medium- and long-term debt, net of buybacks, will remain unchanged at €185bn. At the end of September, gross issuance of medium- and long-term debt stood at €173.6bn.

9. State debt service is expected to stand at €41.8bn, versus the figure of €41.5bn in the initial Budget Act.

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