France backs €36bn defence despite deficit

The French National Assembly approved €36 billion in extra military spending on 19 May, lifting planned defence investment through 2030 to €436 billion (Le Monde, Al-Monitor). The vote passed 440 to 122, with only the far-left La France Insoumise and the Greens voting against.

It is France's largest upward revision to military spending in decades. But the EU's only nuclear power is also the state that cannot use the fiscal flexibility now helping 17 other member states pay for rearmament.

Shells before new platforms

The €36 billion is mostly for what gets used up, not for a bigger force structure. The largest lines are €8.5 billion for munitions and €8.4 billion in total for drones and remotely piloted systems. More money goes to early-warning satellites (€3.9 billion) and air-defence interceptors co-produced with Italy (€1.6 billion) (Al-Monitor).

This is Ukraine translated into a French budget. After three years in which European ammunition stocks were drained by war, Paris is spending first on what disappears fastest.

The prestige programmes have not been brought forward. There are no new Rafale fighter orders, no extra frigates, and no increase for the Franco-German sixth-generation combat aircraft. Defence industrialists describe the revision as funding "the format voted in 2023 that was under-financed", rather than expanding it (Forces Opérations).

Around 90% of the spending remains with French firms, the highest domestic-procurement ratio in Europe (Defense News). For Maltese readers used to seeing EU procurement rules collide with national industrial interests, France is the clearest example of a member state treating defence spending as both security policy and industrial policy.

The escape clause France cannot use

The EU's 2024 fiscal reform created a defence escape clause. It lets countries exclude up to 1.5% of GDP in extra military spending from deficit calculations. Seventeen member states have activated it (Epicenter Network, Brussels Signal).

France has not, because the door is already closed. Since July 2024, it has been under the EU's Excessive Deficit Procedure, the formal process triggered when a member state's deficit breaches the 3% of GDP ceiling. France's deficit stands at 5.1%.

The escape clause can stop new procedures being opened because of defence spending. It does not lift existing ones. Article 8 of Regulation EU 2024/1264 still requires France to bring its deficit below 3% by 2029, whatever it spends on missiles and satellites.

That matters across the eurozone, including Malta, because EU fiscal rules are not accounting theatre. They determine which governments can borrow cheaply, which ones must cut elsewhere, and which political promises survive contact with Brussels.

The imbalance is clear. Germany reformed its constitutional debt brake and activated the clause. It spent €108 billion on defence in 2026, nearly twice France's €57 billion. Poland became the first country to sign EU SAFE defence loans, a new EU borrowing facility for military spending, worth €43.7 billion, and spends 4.5% of GDP on its military.

The countries with the most room to rearm are not the countries carrying Europe's nuclear deterrent.

France's borrowing costs are tightening the trap. Ten-year bond yields reached their highest level since 2009 in May. The projected interest bill for 2026, €74 billion, is already larger than the defence budget. France is borrowing to service debt while borrowing to rearm.

Rules under pressure

The vote brought an unusually broad majority. The Rassemblement National and the Socialists both joined the governing bloc, one of the widest cross-party alignments on defence in years.

But the bill passed without new revenue measures. It relies instead on billions in cuts to other ministries. Opposition from the left was also about power, not only money: deputies warned that the bill gives the executive vaguely defined powers to override environmental and planning rules during security emergencies.

Macron has argued for defence to be treated separately in deficit calculations. Italy's Giorgia Meloni has threatened to quit the SAFE loan programme unless the escape clause is extended to energy costs. Roughly half the states using the defence clause are using the freed-up room for non-defence spending, weakening the credibility of the mechanism just as pressure grows to widen it.

The bill now goes to the French Senate on 2 June. The parliamentary arithmetic is settled. The fiscal arithmetic is not.