France is exploring ways to increase defense spending while grappling with a growing deficit and rising borrowing costs, Bloomberg reported.

Finance Minister Eric Lombard confirmed that France has committed “a bit above 2%” of its GDP to military and security funding, with plans for further increases. “We will need to find room for maneuver because it’s clear that the new world balance requires an increased effort in defense to preserve peace,” he stated during a press conference on Monday.

The push for higher defense expenditures, according to the report, has gained urgency following the outbreak of the war in Ukraine and US President Donald Trump’s calls for Europe to take greater responsibility for its security.

European leaders convened in London on Sunday after Trump’s tense meeting with Ukrainian President Volodymyr Zelensky at the White House, after making direct contact with Russian President Vladimir Putin to discuss ending the war.

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The European Council is set to meet on Thursday to deliberate on a €20 billion ($21 billion) military aid package for Ukraine, as well as potential measures to raise defense spending, including a possible relaxation of fiscal constraints.

Lombard’s remarks came as he and Budget Minister Amelie de Montchalin outlined a strategy on Monday to regain control over public finances. Recent financial setbacks have complicated efforts to reduce the deficit and contributed to a sharp rise in borrowing costs.

After months of political deadlock that led to the government’s collapse in December, France finally passed its 2025 budget last month. The new financial plan seeks to lower the deficit from around 6% of GDP in 2024 to 5.4% this year.

On Friday, S&P Global Ratings issued a fresh warning on France’s financial stability, placing the country’s credit outlook under negative review. Lombard argued that stronger employment levels could help alleviate fiscal pressures, stating, “If we had Germany’s employment rate, we wouldn’t have a deficit.”

Meanwhile, France’s unemployment rate stood at 7.3% in late 2024, while Germany’s was between 3.5% and 3.6%, according to ILO data.

Germany’s potential next government, expected to be led by conservative Friedrich Merz, is weighing significant investments in defense and infrastructure. Bloomberg recently reported that the CDU/CSU alliance and Chancellor Olaf Scholz’s Social Democrats are discussing a special defense fund worth up to €200 billion.

Read more: UK's Starmer, Germany’s Merz eye boosting defense spending