France faces debt crisis as audit office warns of market vulnerability

The public audit office projects national debt to swell by more than €160 billion by 2026, pushing the total beyond €3.6 trillion—roughly 118.5% of GDP. This surge is compounded by ballooning interest payments, which are expected to climb to €77.4 billion as higher rates on new debt outpace current austerity efforts. Senior auditor Carine Camby described the situation as a present reality rather than a future risk, noting that excessive leverage is already strangling the government's ability to maneuver.

Fiscal planning remains fragile, as current strategies lean heavily on tax increases while substantive spending cuts remain poorly documented. Political volatility exacerbates these pressures; since losing his parliamentary majority in 2024, President Emmanuel Macron’s administration has struggled to push through consistent budgetary reforms. The audit office insists that without a credible multi-year strategy to reduce the deficit below 3% of GDP by 2029, France will remain at the mercy of financial markets that are increasingly skeptical of Paris’s capacity to meet its long-term obligations.