France Halts €4B Spending Over Iran War Fallout

By Staff, Agencies

France has frozen nearly €4 billion in public spending as it seeks to offset the economic impact of the US-"Israeli" war on Iran, French media reported, citing Budget Minister David Amiel.

The French Ministry of Economy and Finance announced a plan to freeze 3.2 billion euros in state budget appropriations, while canceling an additional 847 million euros in allocations as part of emergency austerity measures to manage the war’s financial impact.

The cuts will affect most government ministries, though the budgets of the Defense and Justice Ministries will remain protected from any reductions amid mounting regional instability and rising security concerns.

The move follows another cost-saving measure introduced by the French government last week, which suspended a planned reduction in social security contributions for low-income workers, generating an estimated 2.2 billion euros in savings.

French authorities expect the combined measures to save around 6 billion euros in total, including 4 billion euros from ministry budgets and 2 billion euros from social spending programs.

According to the Finance Ministry, the spending freeze remains temporary and could be reversed later this year depending on developments surrounding the war in the region.

French officials are expected to hold another meeting at the end of June to discuss additional emergency austerity measures.

France’s economy is showing strain amid the fallout from the US-Israeli war on Iran, with warnings that consumer prices could rise 4–5% in the coming months.

GDP growth stalled at 0% in the first quarter, while surveys indicate widespread pessimism, with most respondents negative about both the national economy and their personal finances.

The situation has been further worsened by energy disruptions linked to the Strait of Hormuz blockade and broader regional instability.