Eurozone alarm: France’s debt crisis deepens amid political shake-up

The fall of François Bayrou, former Prime Minister, occurred after he jeopardized his government in an emergency confidence debate over France’s debt.

Bayrou spent the summer warning of an existential threat to France if action was not taken to address the €3.4 trillion debt.

In France’s 2026 budget proposal, Bayrou suggested canceling two national holidays and freezing welfare payments and pensions to save €44 billion.

However, the former Prime Minister quickly lost any hope that his warnings of financial ruin would sway opponents.

French political parties indicated that the confidence vote was seen as an opportunity to settle scores with Bayrou—and, through him, with President Macron.

Some analysts described Bayrou’s fall as a political self-destruction; there was no need for an early confidence vote, and he could have spent the coming months building support.

Meanwhile, a movement calling itself “Let’s Block Everything” has promised a wave of sit-ins, strikes, and protests against Macron’s policies, with several unions calling for demonstrations.

Most economic analysts agree that France will face major financial challenges in the coming years, as projected debt servicing costs are set to rise from €30 billion in 2020 to over €100 billion by 2030.

Calls for fiscal restraint come as Macron pledges additional military spending, while both far-left and far-right opposition parties demand the repeal of the latest pension reform, which raised the retirement age to 64.

Bayrou took office last December after Michel Barnier failed to pass his budget plan through Parliament.

Meanwhile, credit rating agency Fitch downgraded France’s sovereign credit rating to its lowest level ever, stripping the Eurozone’s second-largest economy of its previous standing amid political turmoil and rising debt.

This move increases pressure on Sebastien Lecornu, the new Prime Minister, just days into office, as he struggles to form a cabinet and get the 2026 budget approved in a deeply divided Parliament.

Fitch stated that this rating—the lowest ever recorded by a major credit agency—reflects a lack of “a clear horizon for debt stabilization in the coming years,” signaling a challenging outlook for future fiscal measures.