This year witnessed a French government embroiled in near-constant turmoil. The appointment of Sébastien Lecornu as its fifth prime minister in less than two years highlighted a prolonged period of instability that’s left President Emmanuel Macron unable to navigate a fractured parliament riven by rising populism.
At the heart of the crisis is France’s outsized debt, its beloved social safety net and what many see as the economic imperative in scaling it back. On this *Bloomberg Originals* weekly documentary, we lay out the political minefield faced by Macron, the grave stakes for the country’s economy and what might need to happen to break the deadlock.
WATCH *Can France Fix Its Debt Problem?*
Unlike the US and indeed many other developed nations, French taxpayers receive pensions, healthcare and unemployment compensation that provide a comfortable cushion. Such benefits are closely tied to the nation’s identity and underpinned by a belief that the state is responsible for ensuring the welfare and equality of the citizens who fund it.
But the math hasn’t worked for some time now. An aging population means the amount of public spending required to sustain this system has piled pressure on public finances, fueling the largest deficit in the euro-area. Significant efforts to tackle government debt through welfare reform have been hampered by protests and legislative gridlock as the ascendant far-right along with left push back.
In this mini-documentary, we explore the impact of France’s political paralysis, the risks of delay and the consequences for markets. A series of credit rating downgrades in the past year have challenged the country’s fiscal credibility, raising risks both on a domestic level and for the Eurozone.
While the National Assembly’s recent adoption of a social security bill for 2026 offers a glimmer of hope, a major breakthrough is unlikely until Macron leaves office in 2027. The parties are currently positioning themselves for the presidential election campaign, which means signing on to any major reductions in benefits appears unlikely anytime soon.
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This year witnessed a French government embroiled in near-constant turmoil. The appointment of Sébastien Lecornu as its fifth prime minister in less than two years highlighted a prolonged period of instability that’s left President Emmanuel Macron unable to navigate a fractured parliament riven by rising populism.
At the heart of the crisis is France’s outsized debt, its beloved social safety net and what many see as the economic imperative in scaling it back. On this *Bloomberg Originals* weekly documentary, we lay out the political minefield faced by Macron, the grave stakes for the country’s economy and what might need to happen to break the deadlock.
WATCH *Can France Fix Its Debt Problem?*
Unlike the US and indeed many other developed nations, French taxpayers receive pensions, healthcare and unemployment compensation that provide a comfortable cushion. Such benefits are closely tied to the nation’s identity and underpinned by a belief that the state is responsible for ensuring the welfare and equality of the citizens who fund it.
But the math hasn’t worked for some time now. An aging population means the amount of public spending required to sustain this system has piled pressure on public finances, fueling the largest deficit in the euro-area. Significant efforts to tackle government debt through welfare reform have been hampered by protests and legislative gridlock as the ascendant far-right along with left push back.
In this mini-documentary, we explore the impact of France’s political paralysis, the risks of delay and the consequences for markets. A series of credit rating downgrades in the past year have challenged the country’s fiscal credibility, raising risks both on a domestic level and for the Eurozone.
While the National Assembly’s recent adoption of a social security bill for 2026 offers a glimmer of hope, a major breakthrough is unlikely until Macron leaves office in 2027. The parties are currently positioning themselves for the presidential election campaign, which means signing on to any major reductions in benefits appears unlikely anytime soon.