By Patrick Decloitre of RNZ Pacific
French Prime Minister Sébastien Lecornu has announced more financial assistance for New Caledonia to assist the financially-embattled French Pacific territory.
The announcement follows a three-hour meeting with a bipartisan delegation led by New Caledonia’s President Milakulo Tukumuli this week.
Lecornu said this was to serve as a lifebuoy to help New Caledonia overcome its most urgent challenges, including a near-collapse of the French territory’s pension scheme and medicare, which are both described as being on the verge of collapse.
Its other aim was to help New Caledonia conclude its 2026 financial year (11 million euros) and balance its 2027 budget (50 million euros).
A major part of the announced assistance was also quoted as amounting to “400 to 600 million euros”.
He also spoke about consultations to coordinate the package’s implementation during a “Prime Minister’s mission” team at a date yet to be determined.
Since his election in July 2026, Tukumuli has expressed serious concerns regarding New Caledonia’s financial situation and the risk of what he termed a “shutdown”.
High debt level
He also expressed serious concerns at New Caledonia’s high level of debt, following loans contracted with the French government as a result of the covid crisis and, more recently, the civil unrest that took place in May 2024.
The unrest and its related effects caused 14 deaths and significantly impacted New Caledonia’s economy, with an estimated €2 billion in material damage (mostly to local businesses) and an estimated drop of 13.5 percent in the Gross Domestic Product, as well as over 12,000 unemployed.
New Caledonia’s recurrent request was also, in the face of record debt, to obtain that current loans (and its interests) be converted into into non-refundable grants.
Lecornu said most of this fresh assistance would be in the form of grants.
Apart from Lecornu, New Caledonia’s group of politicians, since Monday, have held meetings in Paris with top officials from the Finance ministry, French minister for Overseas Naïma Moutchou and both Presidents of France’s Parliament chambers, the Senate (Gérard Larcher) and the National Assembly (Yaël Braun-Pivet).
They are also scheduled to meet French President Emmanuel Macron on Friday this week (Paris time).
The announcement was also understood to come with strings attached, in the form of assurances from New Caledonia’s government that “urgent reforms” will be carried out.
Cautious satisfaction
Reacting to Lecornu’s announcement, New Caledonia’s Congress President (Speaker) Virginie Ruffenach, who is part of the delegation, expressed cautious satisfaction.
She acknowledged the response was “very good news” and met “about 90 percent of our request” for an initial plea of 540 million euros.
But she remained cautious and said the announcement now required “clarifications”, especially on how much will be disbursed in the form of grants and how much through loans.
“We don’t want to bring more debt to New Caledonia,” she said.
She assured that New Caledonia had already passed a significant number of reforms resulting in savings of “365 million euros”.
“It’s a lot, but it’s not enough. We’re just beginning to recover. Our fiscal revenues are slightly increasing … But this needs to be accompanied for at least two years,” she told reporters in Paris.
Tukumuli earlier stressed that more loans for the French Pacific territory was just “untenable”.
“Between 2020 and 2026, we have borrowed 1.5 billion euros,” New Caledonia’s President elaborated.
“And now we have arrived at a totally unreal situation whereby in 2026, we have borrowed again to repay the 2025 loan”.
The announced commitment will however have to receive the French Parliament’s approval, as part of the French 2027 budget debates.
Throughout the week, New Caledonia’s delegation has also held lobbying talks with French MPs from caucuses across the political chessboard, only months ahead of France’s Presidential and general elections, starting in April 2027.
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