France's 2027 budget debates signal economic concerns as its debt nears a historic danger zone, with projections showing it could become the EU's most indebted nation within seven years.
Debates on 2027 budget begin
The National Assembly started debating the 2027 budget bill on Tuesday, October 13. These debates are considered important for shaping France's economic future, especially as the 2027 presidential election approaches.France’s debt position in the EU
France is currently the third most indebted country in the European Union when measured as a percentage of its GDP. In the first quarter of 2026, its debt reached 118% of GDP, which is 21 percentage points less than Italy and 26 points less than Greece.Future debt projections
According to some calculations, France could become the most indebted EU member state within the next decade. It might surpass Greece as early as 2028 or 2029 and overtake Italy between 2033 and 2040.Rising debt in Central and Eastern Europe
Several countries in Central and Eastern Europe are also seeing their debt-to-GDP ratios rise. Poland’s could double by 2050, Romania’s could reach 113%, and Slovakia’s would increase significantly. Germany’s debt could also rise by 16 percentage points by 2050.Warning on France’s debt
At the end of September, economist Shahin Vallée warned that France had entered a "historical danger zone" regarding its debt. The OAT-Bund spread, which compares France’s borrowing costs to Germany’s, rose to 140 basis points in early October, a 60% increase in a year.Krugman’s analysis of default risk
American economist Paul Krugman notes that while French debt has risen, the cost of insurance against a default remains lower than during the European debt crisis. The chance of a French default in the next five years is estimated at only 1.2%.
