Nobel laureate economist Paul Krugman says France may have become “too big to save” for the European Central Bank due to an unsustainable fiscal path. The French government is struggling to pass the 2027 budget, which includes tens of billions of dollars in fiscal consolidation, while student protests over education underfunding continue. Krugman highlights France’s high debt-to-GDP ratio, large budget deficits, and the failure to address its relatively low retirement age. Former ECB president Jean-Claude Trichet urged French politicians to find a credible compromise to reassure markets, noting that the European Stability Mechanism and the ECB’s Transmission Protection Instrument could be activated in a crisis.
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