Business · Markets · 13 hrs ago
Political uncertainty and debt concerns weigh on the euro
The euro has recently fallen below $1.12, after trading above $1.20 at times in January.
Investors are concerned about high public debt in Europe, especially France, where government debt is 119% of the country’s economic output.
Political uncertainty is adding to those worries: France has a presidential election in spring 2027, and Spain’s prime minister has called an early parliamentary election for November after a dispute over housing policy.
High living costs have also put pressure on households and fuelled anger at governments.
Economists say weak growth in France and across the eurozone makes high debt harder to manage.
They do not generally expect a new European debt crisis, and one economist says the European Central Bank would probably provide support if needed.
But experts say the euro may not recover significantly soon, while the US economy and dollar remain stronger.
The euro has repeatedly fallen below $1.12 as political uncertainty and concerns about European government debt weigh on the currency.
France’s public debt is 119 percent of gross domestic product, and investors are concerned about debt levels across Europe.
Political uncertainty in France and Spain is adding to pressure on the euro.
Economists also point to weak growth in France and the eurozone as a concern for investors.
Some economists do not expect a new European debt crisis, and say the European Central Bank could provide support.
- Who
- The euro and investors in currency markets. Economists cited include Carsten Brzeski, Eckard Schulte and Tommy von Brömsen.
- What
- The euro is under pressure amid political uncertainty, debt concerns and weak growth in Europe.
- When
- The article was published on October 12, 2026.
- Where
- The eurozone, with political uncertainty highlighted in France and Spain.
- Why
- Investors are concerned about high public debt, political uncertainty and low growth in France and the eurozone.
This story does not have two clearly opposing sides.
The euro was at times above $1.20.
The euro had repeatedly fallen below $1.12, amid political uncertainty and concerns about European public finances.
Spain’s prime minister, Pedro Sánchez, announced an early parliamentary election for November.
France is due to hold a presidential election.
- Euro exchange rate
- Repeatedly below $1.12
- Euro exchange rate in January
- At times above $1.20
- French public debt
- 119 percent of gross domestic product
- France presidential election
- Spring 2027
- Spain parliamentary election
- Announced for November 2026
What people are saying
France will not go bankrupt. The European Central Bank will probably step in to provide support.
The real problem is that France and the eurozone as a whole are growing so little.
When you look at the euro-dollar exchange rate, it is not only about the strength of the dollar, but also the weakness of the euro due to the political situation in France.
I do not see the euro appreciating significantly in this environment.
Sources
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