This is a shocking figure revealed by the Natixis bank. In 2025, France will borrow 340 billion euros on the financial markets. France should thus become the largest borrower in the euro zone, ahead of Italy and its 325 billion euros in loans. An inglorious title of European champion of borrowing, a consequence of the slippage in public finances?
340 billion euros. This is the amount that France will borrow on the financial markets for the year 2025. An amount which makes France the European champion of borrowing ahead of Italy. And this would be a consequence of the slippage in public finances.
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“A state like France never reduces its debt, it rolls it over”
The public debt has reached 3,300 billion euros. The deficit could exceed 6% of GDP in 2024 and 2025. And this is what forces France to borrow colossal amounts on the markets, as explained by Éric Dor, professor of economics at IESSEG.
“The sum of the public deficit for the year and what must be borrowed to repay investors who have already lent, that creates this enormous financing need. A state like France never reduces its debt, it rolls it over, we repay people who have debts on France, but by borrowing from other investors.”
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As long as there is no surge in interest rates, this headlong rush has no dramatic consequences on the economy. At this stage, investors believe France capable of repaying its debts. They continue to lend at reasonable rates, although slightly increasing, around 3%.
However, since the dissolution, a shadow of doubt has appeared. And the slow rise in rates is starting to pay off in cash: “With a continued slippage in France’s public finances, obviously people are becoming more suspicious of a very large borrower. This forces the public budget to devote a a large part of one’s resources to pay interest, it’s obviously not the smartest expenditure there is.”
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In 2025, the amount of interest on the debt will reach 55 billion euros, according to Agence France Trésor. Which represents almost 800 euros per French person.
