France faces a significant economic challenge, as the governor of the Bank of France, François Villeroy de Galhau, warned of a risk of gradual “suffocation” stemming from the country’s budget and debt problems. In an interview with *La Croix*, he acknowledged that France has a “serious budgetary problem,” with a government deficit of 5.4 % of GDP projected for 2025—only a slight improvement from 5.8 % last year. Villeroy de Galhau stressed the need to reduce the shortfall to 3 % by 2029 in order to restore fiscal credibility.
Debt‑servicing costs are expected to soar from €30 billion in 2020 to more than €100 billion by the end of the decade, more than three times the current amount. Higher interest rates are already raising borrowing costs for households and businesses, diverting funds from priorities such as defense and the green transition. France’s public debt now stands at €3.3 trillion, roughly 115 % of GDP, representing a heavy burden for future generations.
The warning follows Moody’s revision of France’s sovereign outlook from stable to negative, citing political “fragmentation” that could impede policymaking. Other rating agencies, including Fitch and S&P Global, have also downgraded France’s credit rating to A+, flagging fiscal and political risks.
Despite these concerns, Villeroy de Galhau maintained a modest growth forecast of around 0.7 % for 2025, noting that France remains a major European economy that has created many jobs over the past decade. With unemployment hovering around 7.5 %, the country must balance deficit reduction with support for economic growth. The French government therefore faces a formidable task in restoring fiscal credibility and ensuring the long‑term sustainability of its economy, as the growing debt burden will be inherited by future generations.
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