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07.04.26 - 08:51
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France′s Debt Spiral: Tax Hikes Mask A Looming Crisis (ZeroHedge)
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France's Debt Spiral: Tax Hikes Mask A Looming Crisis
Submitted by Thomas Kolbe
On both sides of the Franco-German border, the same problem persists: overburdened and reform-averse politicians struggle against a rapidly accelerating debt spiral. Their preferred tool: higher levies.
Last week, France's Finance Minister Roland Lescure reported a revision of the projected budget deficit for the current year.
Initial estimates for 2026 had suggested a deficit well above five percent. Yet numerous fiscal measures brought last year's deficit down to 5.1%. For 2026, the Finance Ministry expects it to stabilize at around five percent—provided the ongoing energy crisis and the war in Iran do not cast a lasting shadow over the year, and the economy does not abruptly collapse.
With total public debt at roughly 115% of GDP, France cannot possibly meet the Maastricht criteria under this level of new borrowing.
Do restrictive fiscal rules, such as the increasingly fading Maastricht criteria, even matte...
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