Budget crisis | France's debt is growing

People stroll through the La Defense business district outside Paris. French national debt as a percentage of economic output rose to 119.0 percent at the end of the second quarter of 2026, a new historical high. Photo: dpa/AP/Thibault Camus Berlin. Renowned economists have warned of a new debt crisis given France's high level of debt. “The debt crisis in France is very serious,” said economics professor Ulrike Neyer from the University of Düsseldorf to the “Rheinische Post”. In France there is currently "a dramatic mix of high debts, extremely tense budgetary situations, hardly any economic growth, and political instability." This situation is significantly weakening investor confidence in French government bonds. France is “currently the biggest problem in the euro area.”

Although Greece and Italy still had higher debt ratios, "Greece is now achieving budget surpluses and Italy has reduced its deficit to around three percent," said the economist. Added to this is the unstable political situation in France. There is no improvement in sight.

France is currently in worse financial shape than it has been for a long time. The government expects national debt to amount to 121.7 percent of gross domestic product next year. France currently has the highest debt ratio in the EU. The interest burden this year amounts to almost 80 billion euros, significantly more than the budget of the Ministry of Education. The yield on ten-year French government bonds recently rose to 4.9 percent - a high since 2002. Concern is growing on the financial markets about France's high level of debt.

The head of the German Institute for Economic Research (DIW), Marcel Fratzscher, primarily sees long-term problems. "The greater concern today is a vicious circle in which rising debts and political paralysis further weaken trust in state institutions and thus drive up interest rates," Fratzscher told the newspaper. The result is “a weaker economy and an increasing risk of recession, causing deficits and debts to increase even more.”

"In the long term, this dynamic can lead to a debt crisis," he warned. A change of course in French financial policy is therefore “urgently necessary”. However, worries about an imminent debt crisis in France are exaggerated, said the economist.

However, there is one point I would actually check before publication: the statement “highest debt ratio in the EU” and the 121.7 percent for the coming year. These are concrete current figures for which the forecast year and data source are crucial. dpa/nd

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