France’s Soaring Debt, Political Deadlock Raise Eurozone Stability Fears

By Staff, Agencies

France’s mounting sovereign debt and deepening political rifts could threaten the Eurozone’s fiscal stability, Deutsche Welle reported, citing economic experts.

The country’s debt now stands at €3.35 trillion ($3.9 trillion) — about 113% of GDP — and is projected to hit 125% by 2030. Its budget deficit, estimated between 5.4% and 5.8% this year, far exceeds the EU’s 3% ceiling.

Friedrich Heinemann of the ZEW Leibniz Center for European Economic Research warned, “We should be worried. The eurozone is not stable at this point.”

A drastic austerity plan by Prime Minister Francois Bayrou — involving public sector cuts, welfare reductions, and scrapping two public holidays — collapsed on Monday after he lost a no-confidence vote.

A recent Elabe poll showed widespread public opposition to the measures.

In July, Bloomberg similarly cited ING analysts warning that France’s debt could become a “ticking bomb” for EU financial stability.

Despite its fiscal woes, France intends to double military spending to €64 billion by 2027, citing a Russian threat that Moscow has repeatedly dismissed as “nonsense.”

In May, EU states approved a €150 billion debt program for arms procurement, adding further pressure on European budgets.