Renaud Girard: “France, Europe’s Financial Shame” - Le Figaro

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Our European neighbors have added “golden rules” for fiscal discipline in their respective constitutions. France must do the same and stick to them.

If a financial expert had told me 20 years ago that the French government would one day borrow at higher rates on the global bond market than Greece, Italy, Portugal and Spain — “Club Med” countries that German central bankers deemed unreliable — I would have immediately dismissed that expert and called him a charlatan. I would have been quite wrong. Because that is exactly what is happening today. On the 10-year bond market, the French government is borrowing at 4.11%, while the rate is 3.7% for Portugal, 3.8% for Spain, 3.9% for Greece, and 4% for Italy.

As for our Italian neighbor and cousin, it has had a primary budget surplus (excluding interest on debt) since 2024. The Italian government covers its non-interest expenditures with its revenues, even generating a surplus of 0.8% of its GDP. France’s primary budget deficit (excluding interest on debt) amounts to 3% of its GDP. That is why the markets currently view Italy more favorably than France.

Today, the countries of northern Europe — which all manage their public finances properly and meet all the criteria of the Maastricht Treaty — view France as an unreliable country, a “Club Med” nation, and even the worst of the bunch.

When President Emmanuel Macron took office in 2017, France promised it would meet the Maastricht criteria (public deficit below 3% of GDP, debt below 60% of GDP). After all, it was France that had proposed these criteria during the negotiations on the single currency — the Germans would have preferred no deficit at all, except to finance major public investments. The French and their European allies all believed that Macron — a competent, energetic and hardworking inspector of finances, who had risen to the presidency in the prime of his career — would honor his promise.

That has not been the case. Macron has talked the talk but failed to walk the walk. In nine years, French debt has risen from €2.2 trillion to €3.46 trillion, or from 98% to 118% of GDP. Is COVID-19 or Ukraine to blame? Those excuses are hardly valid, given that German debt remained stable, at 64% of GDP, during the same period. Yet Germany was hit just as hard as France by the COVID-19 pandemic and arguably even harder by the war against Ukraine, launched by Russia in 2022.

Because Germans manage their public finances better than we do and adhere more closely to their European commitments, they are able to borrow at rates 80 basis points lower than ours on international markets.

Using debt to finance current expenditures (something the first two presidents of the Fifth Republic never did) is not a form of financial irresponsibility or an exploitation of future generations unique to Macron. It was practiced on a large scale beginning with the Socialist François Mitterrand, then continued by the covert radical Socialist Jacques Chirac, and carried on under Nicolas Sarkozy and François Hollande. The right has not managed better than the left.

Francis Mer, appointed finance minister to Chirac in 2002, told me about a very brief meeting he had with the president shortly after his reelection. The new minister was concerned about the level of French debt, which he had seen rising steadily for 20 years. He went to propose radical measures to the head of state. No sooner had Mer begun to explain the reason for his visit than Chirac interrupted him: “Francis, this system has lasted for 20 years, hasn’t it? Well, I don’t see why it couldn’t last another 20 years. Good day, Francis!”

Chirac’s financial laxity was all the more surprising given that he had served as an auditor and then as a referendary counselor at the Court of Auditors before leaving the senior civil service to enter politics. Hollande was himself a counselor at the Court of Auditors before entering politics. It is paradoxical that the Inspectorate and the Court, two “great bodies” that France created in the 19th century to prevent its finances from spiraling out of control, have ultimately produced politicians who, in times of peace, will significantly undermine them.

September 2026 marks the true start of France’s presidential campaign. It is good that the campaign will last a long time, allowing all major political and social issues to be debated in depth before French voters.

On financial matters, a recurring theme is the need for a “golden rule” on budgeting, one enshrined in the Constitution. I believe it should be very simple: No borrowing allowed to finance current expenditures, but the possibility of incurring government debt for major investment projects, such as nuclear power plants, rail networks, hydroelectric facilities, artificial intelligence and the defense industry.

Our neighbors in Germany, Italy, Switzerland and Spain have added fiscal golden rules to their respective Constitutions. France must do the same and adhere to them, so we are no longer the financial embarrassment of Europe.