The unprecedented wave of student protests in France has exposed financial pressures that economists say could spread to other eurozone countries. The demonstrations began on September 21 over teacher shortages, overcrowded classrooms and the poor condition of school buildings. On October 7, public sector unions joined the students, and protests continued in various parts of the country.
CNN reports that more than 6,000 people have been arrested since the movement began. The network also cites data that between 400 and 500 of the country's 3,600 high schools expected to close on October 5. French authorities say security forces intervene when people or property are threatened, not when peaceful demonstrations occur.
Debt hits 119% of GDP
The financial pressure comes amid record debt levels. France's public debt reached 3.596 trillion euros at the end of June, equivalent to 119% of gross domestic product, the Associated Press reported, citing the French National Institute of Statistics and Economic Research.
According to CNN, France will pay about 65 billion euros in debt service in 2026. The amount is 25% higher than last year and already exceeds spending on education and defense. The Associated Press reports that interest costs could top 90 billion euros in 2027.
France has not had a budget surplus since 1974, CNN reported, citing Deutsche Bank. Government spending has increased since the pandemic and energy crisis, and higher interest rates are making new financing more expensive.
Markets watch budget, election
French government bond yields have risen sharply, and the spread over German bonds has reached its highest level since 2012. This means investors are demanding higher yields to finance France. Against this backdrop, the euro fell to around $1.12, its weakest level against the U.S. currency since May 2025.
The draft budget for 2027 envisages spending cuts and tax increases. The government aims to reduce the deficit to around 5% of GDP, but this will require around 54 billion euros in funding. The bill is due to begin parliamentary consideration on October 12, shortly before the presidential elections in the spring of 2027.
“Given the size and systemic importance of France, the potential for contagion to other countries and to the eurozone as a whole is very high and could potentially trigger a serious crisis across the region“, Angel Talavera, chief economist for Europe at Oxford Economics, told CNN.
According to economist Carsten Brzeski of the Dutch bank ING, quoted by CNN, if governments do not limit spending, interest rates will continue to rise. Higher yields make government financing, household loans and business investment more expensive.
The French government is facing rising costs for pensions, defense and public services at the same time. This is precisely what puts Paris before a difficult choice: to restrain spending and risk new social tensions, or to postpone the measures and let financial markets increase the pressure on the country.
Sources: kq2.com, apnews.com, lemonde.fr