France is facing a debt crisis with a record public debt of $4 trillion, or 119% of GDP, its highest level since the post-World War II period. Protests and riots have erupted nationwide over the high cost of living and underinvestment in public services, including education. French bond yields have reached their highest levels in 24 years, with a crucial budget vote scheduled for Tuesday in the National Assembly. If the government fails to pass the budget, France could be forced to seek assistance from the IMF, warned Mujtaba Rahman, managing director for Europe at Eurasia Group. The market’s loss of confidence stems from the rise of extremist parties in upcoming presidential elections and the risk of the country becoming ungovernable, according to analysts.
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