Brief
France faces debt‑crisis protests as bond yields hit 24‑year highs
Nationwide protests over the cost of living turned violent as France's debt reaches a record $4 trillion and bond yields climb to their highest level in 24 years.
By Felo News Desk · Published
Nationwide protests over the high cost of living erupted across France on Saturday, turning into riots that saw luxury boutiques looted, supermarkets ransacked and public buildings defaced or set alight, according to Fortune.
What happened
The unrest followed earlier mass demonstrations earlier in the month, where students highlighted dilapidated classrooms, teacher shortages and schools ill‑equipped for rising temperatures. On Saturday, rioting broke out in several cities, with looting of luxury stores and supermarkets, and fires set in public buildings.
What the reports add
Fortune notes that the protests coincide with a sharp rise in French government bond yields, which have reached the highest levels in 24 years – a warning signal not seen since the euro‑zone debt crisis of 2011. The outlet also cites that France’s public debt now stands at a record $4 trillion, or 119 % of GDP, the highest ratio since the immediate aftermath of World War II.
What was said
Mujtaba Rahman, managing director for Europe at Eurasia Group, wrote in a New York Times op‑ed that “the fiscal crisis is the most dangerous, underlying many of the country’s woes and threatening to bring it to ruin.” He warned that if the government fails to pass the 2027 budget, “the cost of servicing French debt may explode” and France could be forced to seek IMF assistance and “pray for it from the European Central Bank – a humiliation for the world’s seventh‑biggest economy.”
How it came about
France’s debt burden has been aggravated by the pandemic, the wars in Ukraine and Iran, and President Emmanuel Macron’s retreat from earlier reform plans. The proposed 2027 budget, presented by Prime Minister Sébastien Lecornu, aims to reduce the deficit from 5.4 % to 5 % of GDP, but faces a critical vote in the National Assembly on Tuesday. Analysts cited in the article argue that the market’s distrust is as much political as economic, fearing an ungovernable system with far‑right and far‑left parties unlikely to enact needed fiscal adjustments.
Key facts
- France's public debt reached a record $4 trillion, or 119 % of GDP. (fortune.com)
- Bond yields have risen to their highest level in 24 years, the worst since the 2011 euro‑zone crisis. (fortune.com)
- Nationwide protests on Saturday turned into riots, with looting of luxury boutiques and supermarkets. (fortune.com)
- The 2027 budget aims to cut the deficit to 5 % of GDP from 5.4 %, pending a vote on Tuesday. (fortune.com)
- Eurasia Group analyst Mujtaba Rahman warned France could need IMF assistance if the budget fails. (fortune.com)
Sources
- [1] fortune.com — originally reported as “'France, truly, is on the brink' and just days away from a make-or-break moment in its debt crisis, analyst warns, as protests turn into riots”
