France Public Debt Hits Record 3.4 Trillion Euros

France's public debt reached a record 3.4 trillion euros in the second quarter of 2025, representing 115.6 percent of the country's gross domestic product. This figure is nearly double the European Union's 60 percent limit and marks the third-highest ratio in the EU, trailing only Greece and Italy. The debt grew by nearly 80 billion euros in the three months leading up to the report.

Sebastien Lecornu, the Prime Minister appointed by President Emmanuel Macron following the ousting of Francois Bayrou, faces the task of drafting a budget to reduce the euro area's largest deficit by mid-October. Lecornu is attempting to form a government and manage austerity protests despite lacking a parliamentary majority.

Financial pressure intensified as two agencies downgraded France's credit rating within one week due to government instability. Fitch Ratings lowered the assessment from AA- to A+, warning that debt will rise through 2027 without intervention, while Morningstar DBRS cut the rating to AA on September 19.

Marie-Anne Barbat-Layani, head of the Autorité des Marchés Financiers, dismissed claims that the country is in a financial crisis. She argued that France remains investment grade with strong demand for its debt, though she noted that public finances must be fixed in the medium and long term to support investments in defense, education, and energy transition.