France is in a state of fiscal crisis, with its public debt reaching €3.5955 trillion at the end of June, according to figures released today by the National Institute of Statistics and Economic Studies (INSEE), equivalent to 119% of Gross Domestic Product (GDP) and the highest level in the past 80 years.

Compared with the previous March, France’s public debt increased by €59.6 billion, representing a 2% rise in three months. It also exceeded the public debt recorded in the first quarter of 2021 (117.8%), when France, like other European countries, spent large sums of money to avoid an economic recession.

According to the latest government forecasts, public debt is expected to rise to 119.3% of GDP by the end of this year and to 121.7% in 2027.

One consequence of this situation is an increase in France’s borrowing costs. The yield on 10-year bonds has risen to 4.8%, while the yield on 30-year bonds stands at 5.3%, the highest since 2003. France is now borrowing at a higher cost than Greece, Italy, Spain, Portugal and, of course, Germany, where the yield on 10-year bonds stands at 3.65%.

At the same time, all indications suggest that France is entering a period of political and social tensions. Public-sector employees went on strike today, with their industrial action particularly noticeable in the transport, health and education sectors, while it remains unclear whether there will be a majority in the French National Assembly to approve the 2027 state budget.

Meanwhile, France has effectively entered an election period ahead of next spring’s presidential election, as well as the parliamentary elections that will most likely follow. Against this backdrop, it is highly doubtful whether France will be in a position over the next eight months to adopt the austerity measures that more or less everyone agrees are now more necessary than ever.