French economy minister floats taxing the rich to fund military buildup

PARIS — French Economy Minister Eric Lombard said Tuesday that France’s plans to increase defense spending to more than 3 percent of gross domestic product may require more taxes on the rich and setting up defense-focused investment funds for private actors.

“We can look at how the effort can be shared among the French population,” Lombard said during an interview with Franceinfo, opening the door to increasing the fiscal burden on “those with substantial savings."

Lombard ruled out any increases to corporate taxes, though he said the government could raise more money by trying to close legal tax loopholes.

He also said France would look into setting up savings funds devoted to defense spending to "mobilize private actors" — but that he didn’t see the need for France's most popular savings account, the Livret A, to fund arms manufacturers — despite repeated calls from lawmakers to do so. 

France’s seven-year military planning law, adopted by parliament in 2023, foresees €413 billion for defense over the 2024-2030 period. This year’s defense budget is €50.5 billion. 

In an interview with Le Figaro published over the weekend, French President Emmanuel Macron said that money wasn’t going to be enough to face Europe’s growing threats and with the United States disengaging from the continent’s security. 

Macron said European countries need to start spending more than 3 percent of GDP on defense going forward.

The main question for France, a highly indebted country whose soaring deficit reached 6.2 percent of GDP in 2024, is where to find more money. The French budget for 2025, which passed last month after months of uncertainty, contains a mix of €53 billion in spending cuts and tax hikes.

“Our country is facing budgetary constraints, the two issues [defense spending and indebtedness] don't cancel each other out,” Lombard said.

The economy minister pledged that social spending would not be impacted.

He also pushed back against suggestions to seize Russia’s frozen assets to help Ukraine or to beef up the bloc's own defenses. The G7 group of industrialized countries last year agreed to use the profits generated by the assets to back a $50 billion loan to Ukraine.

Besides state funds, France is also counting on EU cash, Macron told Le Figaro. Earlier Tuesday, European Commission President Ursula von der Leyen proposed a new common instrument to boost military spending across the European Union that would allow EU countries to draw on up to €150 billion in loans in the next five years. 

Lombard and Armed Forces Minister Sébastien Lecornu are planning to gather insurance companies, funds and banks to push them to invest more in weapon makers later this month.