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France is facing a severe debt crisis related to the rising burden of public debt, with the debt-to-GDP ratio reaching around 119% in 2026, and debt service costs surpassing 90 billion euros by 2027. A decline in investor confidence has led to a rise in 10-year bond yields to about 4.9%, the highest level since 2002, with a significant spread compared to German bonds. The Prime Minister has presented a new budget featuring a deficit of 5.4% of GDP, amid popular and political opposition, while credit rating experts warn of the possibility of France’s rating being downgraded if financial challenges persist. The country faces pressure to reduce the deficit and lower debt interest payments amidst rising inflation and political disagreements, complicating efforts for fiscal reform.
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