28 September 2020: French State funding for 2021 and situation in 2020


1. This morning, the Council of Ministers adopted the French Budget Bill for 2021. The total financing requirement will stand at €282.3bn, mainly consisting of €152.8bn to cover the deficit to be financed and €127.3bn to redeem medium- and long-term debt maturing in 2021. Absorbing a part of SNCF Réseau debt will also increase the government’s 2021 debt redemptions by €1.3bn.

2. The financing requirement in 2021 will be met by (i) the medium- and long-term government debt issuance programme, net of buybacks, worth €260bn (ii) an increase in outstanding short-term government securities (BTFs) for €18.8bn (iii) and other cash resources of €3.5bn, assuming issue premiums net of discounts worth €3bn.

3. State debt service is expected to stand at €37.1bn, including €0.7bn in interest charges connected with the partial absorption of SNCF Réseau debt.

4. The net year-on-year increase in the nominal value of negotiable State debt with maturities of one year or more will be capped at €132.7bn.

5. The detailed medium- and long-term financing programme for 2021 will be released in December 2020.


6. Since the beginning of 2020, France has benefitted from historically low financing terms in an unprecedented situation on the sovereign debt markets in the euro area. The weighted average yield on medium- and long-term debt securities stood at -0.11% for the first three quarters of the year, compared to 0.11% in 2019 and an average of 1.63% from 2009 to 2017.

7. The deficit to be financed in 2020 has been revised downwards to €206.0bn, compared to the amount of €225.1bn provided for in the third 2020 Supplementary Budget Act (LFR 3) which was adopted in July 2020.

8. The “other cash resources” item, including the recording of net treasury premiums, has been revised upwards to €20bn, compared to €10.5bn provided for in the third 2020 Budget Act (LFR 3 2020).

9. Outstanding short-term government securities will increase by €42.8bn, a lower amount than the €82.9bn expected in the third 2020 Supplementary Budget Act.

10. For 2020, issuance of medium- and long-term debt, net of buybacks, will remain flat at €260.0bn.

11. State debt service is expected to stand at €36.2bn, versus €38.6bn in the initial Budget Act, as a result of a drop in inflation which reduces the service related to securities indexed to inflation.


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