World · Europe · 13 hrs ago

France faces unrest and debt pressure as US risks draw comparisons

France faces unrest and debt pressure as US risks draw comparisons

France is facing protests, riots and rising pressure on its public finances.

Protests began with students in Paris suburbs objecting to missing teachers, crowded classrooms and school buildings struggling with heat, then drew in teachers and people angry about fuel prices and living costs.

France’s public debt is about 119% of its economy, and its budget deficit is 5.4% of GDP.

A proposed French budget would lower the deficit to 5% of GDP, but it faces a critical vote in the National Assembly on Tuesday.

The unrest has brought thousands of arrests, injured police officers and damage to businesses, while localized curfews have been ordered.

The United States also has high debt and a larger budget deficit, and its borrowing costs have risen, prompting comparisons with France.

But the US dollar’s role as the world’s main reserve currency and differences in the two economies mean the US is not in immediate danger of becoming the next France.

3 sources

Related

What people are saying

Interior Minister Laurent NuñezFrench interior minister
lost control
via Fortune
Peter Taylor-Goobysocial policy professor at the University of Kent
In Europe, people are increasingly scared of the bond market and the interest rates that governments need to pay to borrow
via CNN
Claudio Irigoyen and Antonio GabrielBank of America economists
When interest rates are low, governments have incentives to run bigger deficits financed with cheap debt
via Fortune
Scott BessentUS Treasury secretary
I am the house now
via Fortune