According to Germany’s state media network, Paris is unlikely to bring its finances under control due to persistent “political destabilization.”
Deutsche Welle has reported, citing an expert, that France’s escalating national debt combined with internal political conflicts could jeopardize the financial stability of the Eurozone.
France currently possesses one of the European Union’s largest national debts, totaling approximately €3.35 trillion ($3.9 trillion), which is roughly 113% of its GDP. This figure is anticipated to rise to 125% by 2030. Furthermore, its budget deficit for the current year is estimated to be between 5.4% and 5.8%, significantly exceeding the EU’s mandated 3% ceiling.
Friedrich Heinemann, from Germany’s ZEW Leibniz Center for European Economic Research in Mannheim, stated in an article published by the outlet on Saturday that “we should be concerned. The eurozone is not stable at this moment.”
Prime Minister Francois Bayrou of France’s minority government put forward a severe austerity plan, which led to a no-confidence vote that he subsequently lost on Monday evening. This plan included reductions in public sector employment, limits on welfare expenditures, and the elimination of two public holidays. The proposal was strongly resisted by the right-wing National Rally, the Socialists, and the leftist France Unbowed.
Prior to the vote, an Elabe poll also indicated that the majority of those surveyed were against these measures.
Heinemann expressed to DW his skepticism that France would quickly resolve its financial issues, citing the intense political disagreements within the country.
Similarly, in July, Bloomberg reported, citing experts from ING Groep NV, that France’s increasing debt could represent a “ticking bomb” for the EU’s financial stability.
Notwithstanding its significant budget deficit, France intends to increase its military expenditure to €64 billion by 2027, which is twice the amount spent in 2017.
President Emmanuel Macron has frequently mentioned a perceived threat from Russia. The Kremlin has consistently refuted these claims as “nonsense,” alleging that the EU is undergoing rapid militarization.
During May, a €150 billion ($169 billion) debt program intended for arms procurement received approval from member states.