France’s Debt Hits Record €3.4 Trillion, Putting New PM Lecornu Under Intense Pressure

France’s public debt has soared to an all-time high, piling pressure on newly appointed Prime Minister Sebastien Lecornu as he faces protests and political turbulence.

Official figures from the national statistics bureau INSEE, released Thursday, September 25, show that France’s debt climbed to €3.4 trillion ($4 trillion) in the second quarter — equal to 115.6 percent of GDP. This represents an €80 billion rise in just three months and places France as the EU’s third-most indebted nation after Greece and Italy, nearly double the bloc’s 60 percent debt-to-GDP limit.

Lecornu, who took office earlier this month after replacing Francois Bayrou, now faces the task of calming unrest while managing the EU’s largest budget deficit. Bayrou’s nine-month premiership ended after parliament rejected his austerity-driven budget. Lecornu must present a new budget by mid-October, even as he has yet to complete forming his government.

Acknowledging his precarious position, Lecornu reportedly told union leaders he was “the weakest prime minister of the Fifth Republic,” a rare admission highlighting his fragile parliamentary backing.

Bayrou’s proposed €44 billion in savings aimed to bring runaway debt under control, but Lecornu has promised a different approach to ease tensions. The latest data, however, underscores the urgency of fiscal reform. Economists caution that harsh cuts could deepen unrest, risking another government collapse.

Public anger is already mounting, with unions planning nationwide demonstrations on October 2, following last week’s mass protests. Many demonstrators accuse President Emmanuel Macron’s government of pushing austerity measures that disproportionately affect ordinary citizens while sparing the wealthy.

To calm criticism, Lecornu has announced symbolic reforms, including ending lifelong benefits for former prime ministers and reversing Bayrou’s plan to cancel two public holidays. Analysts argue these gestures are largely cosmetic and fail to address structural fiscal challenges.

Experts say France’s deficit was worsened by pandemic spending, subsidies to ease inflation, and unfunded tax cuts. Mathieu Plane of the OFCE economic institute noted, “This deficit is not only a crisis deficit, it’s also structural.”

Negotiations with opposition parties remain tense, with right-wing lawmakers demanding €35 billion in cuts and left-wing parties accepting no more than €22 billion. Economists stress that a sustainable, multi-year plan will be necessary to stabilise the economy without triggering a downturn.

Meanwhile, financial markets are pressuring France, as investors demand higher premiums on French debt, driving up borrowing costs. Earlier this month, Fitch Ratings downgraded France’s credit rating from “AA-” to “A+,” warning that debt would continue to rise until at least 2027 without meaningful reforms.

Francois Ecalle, president of Fipeco, urged combined spending cuts and tax hikes, particularly targeting the wealthy. “It is necessary, if only for social and political reasons, to tax the rich a bit more,” he said.

With protests looming and markets growing cautious, Lecornu faces a critical challenge: restore fiscal credibility while avoiding the political downfall that claimed his predecessor.