Public debt: Why does the situation become very worrying for France?

In France, public debt crystallizes political tensions, panics markets and weakens budgetary sovereignty. With more than 3,400 billion euros to be reimbursed and rates up sharply, the country is exposed to an unprecedented risk. François Bayrou even brandished the threat of a tutorship by the IMF, while investors are starting to doubt.

Market alert and the growing weight of the debt service

Monday evening, the French public debt reached 3,411 billion euros, driving up at the rate of 5,000 euros per second. This critical dynamic begins to worry the markets, as evidenced by the rapid rise in the rates required by investors to lend the state.

The 10 -year rate of French debt jumped 3.49 %, compared to 3.24 % for Spain and very close to 3.51 % of Italy. “There is a tension on the bond part, and that means that France has borrowed more dear today since the announcements of François Bayrou”, A explain Andréa Tueni, market manager at Saxo Banque.

In just two days, visible pressure was exerted on the country's financing conditions.

Behind this bond tension, several objective elements help to increase the bill of public debt:

• The debt burden is now the first budgetary position of the State, before National Education and Defense, with 66 billion euros planned this year, according to official estimates;

• The markets sanction the absence of budgetary arbitration: “We have dropped a whole bunch of taxes, we have increased a whole series of expenses, but there has never been an arbitration between the two”underlines Philippe Waetcher, an economist;

• Despite this situation, France still retains access to the markets: in early August, it successfully lifted 4.5 billion euros over 10 years, proof that confidence is not completely broken.

Indeed, the increase in rates is not only a technical signal. It marks a turning point in the perception of France's budgetary solidity. If the current situation does not yet evoke a crisis, it confirms the entry into a phase where each new loan costs more, still weakening the already precarious balance a little more.

A badly argued debt, a collective effort to redefine

Beyond the figures, it is the very foundations of French public debt that are now criticized. Prime Minister François Bayrou, in a speaking, has drawn up a severe observation. “Debt is each of us,” he declaredby pointing to excessive use of public funds for short -term expenses.

He estimates that this colossal debt, which has increased by 2,000 billion euros in twenty years, was “Consumed in current expenses and protection of our fellow citizens”citing in particular the measures linked to the covid, pensions, reduced VAT or the increase in the salaries of civil servants. He would have preferred debt oriented towards productive investment, judging that “Bad debt hunts the right one”.

This structural criticism is shared, in other words, by the governor of the Banque de France, François Villeroy de Galhau. In an interview, he call has “A real public debate” On the means to get out of this dead end, while insisting on an effort “Just and shared”. If he is careful not to comment on political announcements, he underlines that “Our economic destiny is in our hands”.

Bayrou, for its part, presented an ambitious savings plan in July, aimed at 44 billion euros, including cuts in health, communities, social benefits, and even evoking the abolition of holidays. It provides for a debt burden reaching 75 billion euros from 2026, and up to 107 billion in 2029 if no corrective measure is taken.

In this climate of distrust of traditional monetary policies, cryptos, and in particular bitcoin, gain legitimacy in the eyes of many investors. Presented since its creation as an alternative to over -indebted state currencies, Bitcoin finds a refuge role at times when budgetary credibility vacillates. Its decentralized nature and its algorithmic rarity appeal to those who fear an external intervention on public finances or a loss of monetary sovereignty.

This change of your brand a major political inflection. By placing the question of debt at the heart of the national debate, the government seeks to cause collective awareness. However, this strategy also includes risks: social tension, political uncertainty, even tensions with European partners. Can France then draw from citizens' savings to fill public debt?