France's Debt Hits 119% of GDP

France's national debt climbed to 3,595.5 billion euros in the second quarter of 2026, marking a significant financial milestone.

This figure represents 119% of the nation's GDP, a level not reached since 1946, with projections indicating a further rise to 121.7% of GDP by 2027, placing France at more than double the European Union's 60% debt-to-GDP limit.

The 2008 financial crisis and the 2020 Covid pandemic served as the primary triggers that forced national debt to surge by 180% since 2007, outstripping the 58% growth in GDP.

Key among these triggers were the 2008 financial crisis and the 2020 COVID-19 pandemic, which caused debt to surge by 180% since 2007, while GDP grew by only 58%; during the pandemic, debt growth outpaced GDP as economic activity slowed.

Accounting for 77.4 billion euros by 2026, debt interest is emerging as a primary state budget burden.

These costs are forecast to increase to 91 billion euros in 2027 and exceed 100 billion euros by 2030, necessitating that France borrow 340 billion euros in 2027 just to cover its budget requirements.

Borrowing rates for France climbed to 4.75% this Tuesday, nearing the 2008 peak of 4.87%, signaling a cautious sentiment among investors.

These rising rates are attributed to global inflation, partly linked to the conflict in the Middle East and fluctuating energy prices, as investors harbor moderate confidence in France's capability to stabilize its public finances.

Between 200,000 and 300,000 people participated in 155 marches across France to protest declining purchasing power.

Approximately 10% of public servants went on strike, with firefighters also demanding more resources and threatening further action if their needs are not met amidst the ongoing protests.

With average diesel prices at €2.39 per liter and gasoline at €2.17, 77% of French citizens report cutting other expenses to afford fuel, drawing comparisons to the 2018 'Gilets Jaunes' (Yellow Vests) movement.

The French government plans to nearly triple taxes on highway and airport concessionaires, raising the rate from 4.6% to 12.2%.

This measure aims to generate an additional 800 million euros, bringing total revenue from these companies to 1.4 billion euros, specifically targeting businesses with annual revenues exceeding 120 million euros, although industry critics argue that state taxes could then account for over 50% of their toll revenues.