The State budget

French Budget Bill 2023


  1. On the 26 September 2022, the French Budget Bill for 2023 was presented to the Council of Ministers. The total financing requirement for 2023 will stand at €305.5bn, mainly consisting of €158.5bn to cover the deficit to be financed, down €14.1bn compared to the revised deficit for 2022, and €151.6bn to redeem medium- and long-term debt maturing in 2023, up €10.8bn compared to the figure in the 2022 Supplementary Budget Act (LFR).
  1. The financing requirement in 2023 will be met by (i) the medium- and long-term government debt issuance programme, net of buybacks, worth €270.0bn (ii) a €18.0bn drawdown of the Treasury’s account (iii) an increase in outstanding short-term government securities (BTFs) for €10.4bn (iv) €6.6bn of Covid debt redemption from la Caisse de la dette publique (v) and other cash resources of €0.5bn.
  1. State debt service is expected to stand at €51.7bn, including €0.9bn in interest charges connected with the partial absorption of SNCF Réseau debt.
  1. 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 €118.4bn, 0.8 billion less than in 2022.
  1. The detailed medium- and long-term financing programme for 2023 will be released in December 2022.


  2. At the beginning of the year 2022, the weighted average yield on medium- and long-term debt securities stood at 1.18%, compared to a historic low of -0.05% in 2021, an average of 1.26% from 2009 to 2020, and yields of 4.15% from 1998 to 2008.  
  3. The deficit to be financed in 2022 has been revised downwards to €172.6bn, compared to the amount of €178.4bn provided for in the 2022 LFR which was adopted in August 2022.
  4. The drawdown of the Treasury’s account stood at €49.8bn, decreasing by €2.4bn from the amount provided for in the 2022 LFR.
  5. “Other cash resources”, including the recording of net treasury premiums, are projected at -€5.7bn, compared to -€2.3bn in the 2022 LFR.
  6. Outstanding BTFs will remain stable as expected in the 2022 LFR.
  7. For 2022, issuance of medium- and long-term debt, net of buybacks, will remain flat at €260.0bn.
  8. State debt service is expected to stand at €51.2bn, versus €51.4bn in the 2022 LFR, as a result of the brief fall in rates observed during summer 2022.

Revised Draft Budget Bill 2022

On the 7 July 2022, the Council of Ministers adopted the revised Draft Budget Bill for 2022 (“PLFR”).

The State's borrowing requirement for 2022 is revised to €311.0 billion, which represents an increase of €13.4 billion compared to the initial budget Act (“LFI”). This increase in the financing requirement is mainly due to the increase in the general budget expenditure, in particular to support the purchasing power in an inflationary context, and to the replenishment of the "State Financial Holdings" special appropriation account (“CAS PFE”) to finance operations that may occur in the second half of the year. This increase is partially offset by a rise in forecasted State revenue

The increase from €153.8 billion to €177.6 billion of the “deficit to be financed” line is also due to the increase of the indexation charge provision on inflation-linked bonds. As the additional indexation supplement is paid at maturity, this provision is however offset by the "other cash requirements" line (see table below). The only additional indexation supplement (€1.4 billion) impacting 2022 financing requirements relates to inflation-linked bond amortised in 2022.

The increase in the State’s borrowing requirement will be financed by an increase in the contribution of the Treasury account to the financing resources, which will amount to € 51.4 billion, compared to €32.2 billion forecasted in the LFI.

This contribution will cover both the increase in the borrowing requirement and the downward revision of other cash resources (€-2.3bn compared with €+3.5bn in the LFI), which come from the discounts recorded on new issues in the context of rising interest rates. The cash available on the Treasury account makes this contribution possible, in particular through a reduced deficit in 2021 of €170.7 billion, compared to the €205.1 billion initially forecasted in the second Revised Budget Bill for 2021 of 1 December 2021.

The medium- and long-term debt issuance programme and the variation in short-term debt outstanding (BTFs) remain unchanged compared to the LFI (€260.0 bn of medium- and long-term issuance net of buybacks and no change in BTFs outstanding at year-end).

The detailed medium- and long-term financing programme for 2022 will be released in December 2021.

*The difference of €9.1 billion between the deficit to be financed at €177.6 billion shown in this table and the budget balance as shown in the balance table of the draft amending budget bill, at €168.3 billion, is explained by carryovers from 2021 to 2022.

State financing programme for 2022

On the basis of the 2022 Budget Bill, which provides for medium- and long-term borrowing (OATs) of €260.0bn, net of buybacks, an amount identical to 2021 and 2020, Bruno Le Maire, Minister for the Economy, Finance and the Recovery, has approved the indicative State financing programme for 2022.

In 2022, the total financing requirement will stand at €298.9bn, mainly consisting of €155.1bn to cover the deficit to be financed and €144.4bn to redeem medium- and long-term debt maturing in 2022. This financing requirement will be covered by medium- and long-term borrowing (OATs) of €260.0bn net of buybacks, a €33.5bn contribution from the balance of the Treasury Account, €1.9bn in COVID debt redemptions by the Public Debt Fund (CDP) and other cash sources of €3.5bn, assuming issue premiums net of discounts worth €3.0bn.

As in previous years, Agence France Trésor (AFT) will adjust its debt issuance programme to meet demand and guarantee a liquid market for its securities. The programme stipulates that bonds linked to French and European inflation indices will account for approximately 10% of net medium- and long-term debt issuance.

AFT may buy back debt in 2022 (BTFs and nominal and index-linked OATs) depending on market conditions.

1. New bonds

Nominal bonds:

-    AFT will auction one new 3-year benchmark, one new 5/6-year benchmark, two new 10-year benchmarks and one new 15-year benchmark;
-    AFT will also examine, together with the primary dealers, the prospect of a syndicated issue of a new 20- to 30-year bond, depending on market conditions;
-    AFT will continue to tap its green bonds to meet market demand. These operations will take place up to the limit of eligible green expenditures for 2022, the amount of which will be communicated in January.

Inflation-indexed bonds:

-    AFT will consider the syndicated launch of a new 30-year OAT indexed to the euro-area consumer price index (OAT€i), depending on market conditions;
-    AFT will also examine, together with the primary dealers, the prospect of a syndicated issue of a 10- to 15-year inflation-indexed Green OAT.

More generally, AFT will keep tapping all of the existing nominal and European and French inflation-indexed bonds, depending on demand for them.

2. Auction rules and schedule

An auction of nominal and/or inflation-linked OATs may take place on the first Thursday of the month in December, depending on market conditions and after consultation with primary dealers. During the other months of the year, OATs with maturities of more than 8.5 years will be auctioned on the first Thursday of each month, and OATs maturing in 2 to 8.5 years and inflation-linked OATs will be auctioned on the third Thursday of each month.

Auctions of nominal bonds will be held at 10.50am (Paris time), and auctions of inflation-linked bonds at 11.50am (Paris time). BTFs will be auctioned every Monday at 2.50pm (Paris time).

AFT will inform the market of any changes to the auction schedule.

Regarding the securities to be auctioned, as in previous years, AFT reserves the right to adapt its issuances by tapping non-benchmark issues in response to demand from investors as estimated by the primary dealers.

3. New collective action clauses in new bonds

Effective the first day of the second month following the ratification by all parties of the Agreement Amending the European Stability Mechanism Treaty, new State-issued bonds will include “single-limb” collective action clauses.

For newly created nominal OATs with maturities of 2 years or more, redemption dates will be changed to dates in March or September. For inflation-linked OATs, redemption dates will remain in March and July.
4. Managing average debt maturity

The strategy to reduce the average maturity of negotiable government debt initiated in 2001 has been put on hold. The interest rate swap programme will resume if and when market conditions allow.

5. 2021 financing programme status report

The gross nominal value of medium- and long-term debt issuance in 2021 stood at €285.1bn, consisting of €261.4bn in fixed rate bonds and €23.6bn in inflation-linked bonds.

In 2021, AFT bought back €19.6bn in debt maturing in 2022 and €5.5bn maturing in 2023.