France's Debt Troubles

Why France's deficits and debt rose above EU limits, how political deadlock in 2024-25 made budgets hard to pass, and why ratings agencies downgraded France.

France faces rising public debt.

Numbers

Debt rose to around 113 to 115 percent of GDP.
The deficit exceeded 5 percent of GDP in 2024, well above the EU’s 3 percent rule.

Why

High spending on pensions and welfare.
Pandemic and energy crisis support.
Tax cuts without matching spending cuts.

Political deadlock

After the 2024 snap elections produced a divided parliament, governments struggled to pass budgets.
Several prime ministers fell in quick succession in 2024-25.

Ratings

Credit rating agencies downgraded France, and its borrowing costs rose, at times approaching Italy’s.

EU rules

The EU placed France under an excessive deficit procedure in 2024.

Lesson

Political stability matters for fiscal credibility; without it, debt reduction is hard.

The spread

In 2025, investors demanded nearly as much interest to lend to France as to Italy, a sign of worry about French finances.

Thinking big rich countries can't face debt worries

France's rising debt and politics worried markets.

Key takeaways

French debt rose to about 113 to 115 percent of GDP.
The 2024 deficit exceeded 5 percent of GDP.
Political deadlock made budgets hard to pass.
Ratings downgrades raised borrowing costs.