France’s political stage, once a grand théâtre of Molière’s wit, now plays a tragedy. François Bayrou’s government fell to a 364-194 no-confidence vote, plunging Paris into chaos. Austerity measures hang in the air, while Finance Minister Eric Lombard warned of an IMF bailout as France’s €3.4 trillion debt -116.3 per cent of GDP- soars. The EU is in peril.
Is the need for a bailout an imminent threat? No, but it is a logistical possibility. And France has time and again shocked the world. Periodical self-destruction is almost a cultural characteristic of this great European nation. So concerns are legitimate: A French default, as an eventual result of a political limbo, could shatter Europe’s economy, dim the EU’s global star, and even dismantle the Union.
France’s finances teeter like Louis XVI’s court before the guillotine. The 2024 deficit hit 5.8 per cent (€168.6 billion), making a ridicule of the EU’s 3 per cent rule. Bayrou’s €44 billion austerity package ignited fury, with bond yields at 3.5 per cent, overtaking Greece’s. An IMF bailout, a humiliation unseen since Napoleon’s exile, could be the only way forward if markets hit Paris.
A French default would rock Europe’s foundations. France, 15 per cent of eurozone GDP, could sweep along borrowing costs for Italy and Spain, as in 2011, Reuters reminds. Banks like Deutsche Bank, laden with French bonds, will face losses, risking a credit freeze. “The euro could drop 10 per cent,” warned investment bank Jefferies’ Mohit Kumar, raising import costs for goods and raw materials, thus choking trade.
The EU’s global clout would take a serious blow. France’s €48 billion defence budget is key to NATO and EU missions. A default could gut this, echoing France’s post-Waterloo retreat from world power status. The impact on Brussels would be devastating. What sort of a global player is this, when its second largest economy needs an IMF bailout? This no Greece. This is La République.
Citizen anger fuels the crisis. Only 15 per cent of the French trust Macron to resolve this, notes a Verian poll published in Le Figaro. Dissent over €18 billion in Ukraine aid and 1.1 million asylum applications grows. Les nouveau-Miserables of an elite-run country that destroys its own nation have increasingly little to lose. As did the 1789 peasants who defied Versailles.
A chain reaction looms. Bayrou’s ousting, Macron’s third PM loss in a year, signals mayhem. Right-wing leader Marine Le Pen demands elections, polling at 35 per cent. “France is paralysed”, she declared. Left-wing leader Mélenchon calls Macron “chaos”. Uncertainty reigns. If France, like Greece in 2010, seeks an IMF bailout, Italy’s 137 per cent debt-to-GDP could follow. “A debt explosion would be catastrophic”, warned economist Olivier Blanchard.
Macron only has himself to blame. His 2024 snap election produced a hung parliament -New Popular Front at 182 seats, Ensemble at 168, National Rally at 143. Appointing a new PM will not be an easy task. Elections could crown Le Pen. The 1830 July Revolution toppled a king for less. Today, Macron’s liberal centrism fades like Charles X’s legitimacy.
Europe’s future hangs on a knife’s edge. France’s 44 per cent tax burden, the OECD’s highest, cannot sustain deficits. Other EU members, wary of the Ukraine war toll, open borders, or any other part of the Davos agenda for that matter, are sure to reject a failing France’s lead. The 2005 EU Constitution rejection showed fragility. Paris’s 2025 crisis could end up in a proper downfall.
Could this end the EU as we know it? Well, if a French default destroys southern Europe’s debt markets, Germany, itself €2.5 trillion in debt, will no longer be able to save everyone -not that Berlin would have wanted to do so. Dissent could spread. Brexit proved exits are possible. Europe’s elites must understand that France’s fall could topple the Union’s grand jeu.
Paradox: how can Jews support an ideology which threatens their existence?