24 September 2018 : French State funding for 2019 and situation in 2018


1. This morning, the Cabinet adopted the French Budget Bill for 2019. The total financing requirement will stand at €227.6bn, mainly consisting of €98.7bn to cover the deficit to be financed and €130.2bn to redeem medium- and long-term debt maturing in 2019.

2. The financing requirement in 2019 will be met by (i) the medium- and long-term government debt issuance programme, net of buybacks, worth €195bn; (ii) resources from the active management of government shareholdings and earmarked for debt reduction for €2bn; (iii) an increase in outstanding short-term government securities (BTFs) for €15bn; (iv) an increase in correspondents’ deposits for €11bn, largely due to contributions to the Innovation Fund; (v) a contribution from cash available in the Treasury’s account of €1.1bn; and lastly (vi) other cash sources of €3.5bn, assuming issue premiums net of discounts worth €3bn.

3. State debt service is expected to stand at €42.1bn.  

4. The detailed medium- and long-term financing programme for 2019 will be released in December.


5. Since the beginning of 2018, France has continued to benefit from extremely favourable financing terms. The weighted average yield on medium- and long-term debt securities stood at 0.54% for the first three quarters of the year, compared to 0.65% in 2017, 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 2018 has been revised downwards to €81.3bn, compared to the amount of €85.7bn expected in the 2018 initial Budget Act (LFI) passed in December 2017.

7. Other cash resources, including the recording of net treasury premiums, have been revised upwards to €7.8bn in 2018, compared to €3.5bn expected in the initial Budget Act. The favourable low interest rate context has resulted in the recording of further net treasury premiums in 2018. These premiums, while at a higher level than expected in the initial Budget Act, are still lower than over the period 2015-2017, due to the anchoring of interest rates at a low level and the gradual rolling over of benchmark securities with coupons in line with market rates.

8. The outstanding short-term government securities (BTFs) is reduced by €7.9bn.

9. For 2018, issuance of medium- and long-term debt, net of buybacks, will remain unchanged at €195.0bn. At the end of September, gross issuance of medium- and long-term debt stood at €180.9bn.

10. State debt service is expected to stand at €41.7bn, versus the figure of €41.2bn in the initial Budget Act, owing to an upward revision in interest payments on securities indexed to French and European inflation.


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