Spain grew. Germany grew. The eurozone grew. France shrank, and its minister blamed the heat.

On Friday morning Europe's statistics offices published their first estimates for the summer, and for once the news was mostly good. The euro area grew 0.4% in the third quarter, Eurostat said, double what economists had pencilled in. Spain grew 0.6%. Germany, which spent the summer watching low water on the Rhine slow its barges, still managed 0.2%.

France shrank by 0.1%.

Analysts polled by Reuters had expected a small rise. Instead INSEE, the national statistics office, reported a third quarter in a row without growth: minus 0.2% in the first, zero in the second, minus 0.1% now. Roland Lescure, the finance and economy minister, went on franceinfo to explain. The economy was "at a standstill", he said, because the heatwave had hurt farm output and energy production had fallen. An "unprecedented combination of external and internal shocks", as Reuters translated it.

The heat was real. But it did not stop at the border. The part of the explanation that deserves attention is the other one: the internal shocks. Those are made in Paris.

Read the small print

Look past the headline in INSEE's table and a strange picture appears. French households are still spending: consumption rose 0.4%. The state is spending too: public consumption rose another 0.3%, after 0.4% in the spring. What is falling is the thing that pays for tomorrow. Investment dropped 0.6%, its third fall in a row. Exports fell 1.7%, led by a 9.1% slump in transport equipment, notably aerospace, according to franceinfo.

Now take INSEE's own projection for the full year if nothing changes in the last quarter. The economy grows by 0.2%. Government consumption grows by 1.2%, six times as fast. Household investment, which is mostly housing, falls by 2%. Public investment falls by 2.1%.

So in 2026 the French state is consuming more and building less, and the private economy is following its lead. That is not a heatwave. That is a model.

The wall has a postcode

Lescure's answer is the 2027 budget. "If we don't have the budget adjustment we put in the budget, we will hit the wall," he said, as quoted by Politico. In the same interview, AFP reports, he also said: "France is not heading toward a crisis." Both cannot be the whole truth. Either the wall is close, or it isn't.

What the government calls an adjustment is a plan to bring the deficit down to 5% of GDP next year with €43 billion of savings, Politico reports. Five per cent would still be well above the EU's 3% ceiling. And the arithmetic for this year was already built on sand: the 5.4% target assumed growth of 0.5%. INSEE's carry-over is 0.2%.

Nor is there much reason to think the budget will pass in the normal way. France's split parliament failed to adopt one before the new year in both 2024 and 2025. The likely route is again Article 49.3, the constitutional shortcut that skips a vote and invites a no-confidence motion. Markets have noticed. France's 10-year borrowing cost rose another six basis points after the data, to 4.944%, underperforming the rest of the euro zone, Reuters reported. We wrote last week that the bond market had stopped being polite. It has not started again.

Germany is not the hero either

It would be easy to turn this into a morality tale with Berlin as the good pupil. It isn't one. Germany's growth is, in the words of the DIW institute quoted by Tagesschau, standing "on one leg: the state". Alexander Krüger of Bethmann Bank put it more bluntly: without the debt-financed fiscal package, output would probably have stagnated.

But there is a difference worth naming. Germany is borrowing for infrastructure and defence after years of underinvestment. France is borrowing to keep current spending rising while its public investment falls. One is a gamble on capacity. The other is a subscription.

The street is not asking for less

This is where it gets uncomfortable for every French party at once. Inflation rose to 3.4% in October, the fastest since January 2024, AFP reports. The protests that began in September over living costs and a public-sector pay freeze have filled French streets on recent Saturdays, and the Yellow Vests and student unions have called another day of protest for this one. Few on those marches are asking for a smaller state. They are demanding a more generous one.

The left offers them that. So, in her own way, does Marine Le Pen, whom AFP describes as a fiscal populist who could win next spring. The government offers a budget that cuts the deficit slowly and promises that confidence will do the rest. None of them is saying the sentence that INSEE's table says for them: the French economy is not short of public consumption. It is short of private investment, exports and work that pays.

What a serious plan would sound like

A centre-right government worth the name would start there. Freeze the growth of current public spending, not investment. Cut the charges that make hiring in France so expensive. Protect the exporters, from aerospace to farming, who just took the hit. And stop telling the country that one more 49.3 budget is a turnaround.

Brussels, for its part, could stop pretending. For years the Commission has given Paris room it would never give Rome or Athens, a habit this site has written about before. That has not made France stronger. It has made it the only big euro economy shrinking in a quarter when its neighbours grew.

Lescure is right that the economy "has to restart". But the heatwave is over. The internal shocks are still sitting in the budget.

Update, 31 October 2026, 12:35: Hours after the GDP figures, Fitch kept France at A+ but cut its outlook from stable to negative, citing weaker growth, higher borrowing costs, a wider deficit and "the persistence of political fragmentation" (Fitch). The agency now sees debt rising to about 124% of GDP by 2028, from 115.7% in 2025, Reuters reports. Lescure said the verdict "confirms the absolute need" to pass a budget cutting the deficit to 5% by year-end. Fitch's analysts expect it will pass anyway, "thanks to the constitutional mechanisms available to the government despite the absence of a parliamentary majority", Euronews reports. In other words, even the rating agency is counting on one more 49.3.