France’s Borrowing Exceeds Greece As Macron’s Government On Verge Of Collapse
France is in the midst of a political impasse which could lead to a vote of no confidence and derail Emmanuel Macron’s plans.
Macron is facing multiple crises. (Image: Getty)
French President Emmanuel Macron is grappling with both a political and economic crisis as Paris’ borrowing briefly exceeded Greece’s for the first time on Wednesday.
On the bond market, where debt that has already been issued is traded, Greek bonds were at 3.02%, while French bonds rose to 3.05%.
This indicates the markets are losing faith in the French economy, with French bonds seen as risky as Greek bonds.
The economic woes come as Prime Minister Michel Barnier struggles to garner support for the 2025 budget.
Mr Barnier wants to cut spending and raise taxes to try and tackle the deficit.
Barnier is struggling to garner support for his budget. (Image: Getty)
The New Popular Front, a left-leaning party, has warned it will table a vote of no confidence in the government if the French government tries to force through the budget.
The National Rally, the far-right party associated with Marine Le Pen, has also threatened to back the vote of no confidence.
Earlier this year, parliamentary elections in Paris saw the New Popular Front win the most seats but not enough to win a majority.
Mr Macron then placed Mr Barnier – leader of the Republican Party and former Brexit negotiator for the EU – as Prime Minister.
Loredana Maria Federico, economist at UniCredit, said: “Investors remain concerned about political developments in France, especially due to the government’s difficulties in approving next year’s budget.”
Le Pen has threatened to back a vote of no confidence. (Image: Getty)
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She added that the bond market chaos could spread to the wider French economy “particularly if the current government were to face a no-confidence motion”.
Greece’s economy was hit hard by the 2008 financial crisis, resulting in the country requiring international bailouts.
But Athens has since got its economy heading back in the right direction.
According to the European Commission, Greece is expected to grow 2.1% in 2024.
Brussels noted that Greece’s “public debt-to-GDP ratio has been declining over recent years and is projected to reach 153.1% in 2024, before falling further to 146.8% of GDP in 2025 and 142.7% in 2026.”
