My grandfather used to tell me not to worry about the Germans, as the French were our ‘natural enemies’. That may well be true, but recent events across the Channel suggest that we and our brooding neighbours have more in common than is comfortable.
François Bayrou resigned on Tuesday as France’s prime minister after losing a no-confidence vote on Monday – he lasted only nine months. The vote was called in a desperate attempt for support, with Bayrou telling colleagues that he needed parliamentary backing for austerity measures to escape France’s ‘inexorable swamp of debt’. Bayrou ultimately had just 194 votes in his favour and 364 against him. Emmanuel Macron has now appointed the 39-year-old Sébastien Lecornu as prime minister.
Bayrou may be gone but he was right about the scale of his nation’s debt – it is indeed a swamp, and amphibious though the French may be, it will not be easy to escape.
Standing at 114.1%, France’s debt-to-GDP ratio is currently so high that within the European Union, it is only surpassed by the Greeks and the Italians. The markets have responded brutally with higher-risk premiums on French bonds. While German bonds carry an interest rate of around 2.7%, the French need to pay almost 3.5% interest for their debt. The only reason the markets are not even more spooked is because of the belief that the European Central Bank may still swoop in to buy French bonds to stabilise the market. But that hope could be misplaced, warns one economist, as doing so would likely undermine the ECB’s credibility.
How did France – the nation whose fiscal stability was such that they laughed at us during Brexit – get to this point? Years of uncontrolled public spending and an unwillingness to accept the political trade-offs of averting the coming crisis.
The French state currently spends more as a percentage of GDP than any other developed economy. The cuts proposed by Bayrou to reduce this barely touched the sides of the nation’s crisis – they would have shaved about two percentage points off spending. Yet so addicted are the French to their entitlements that this was unpalatable for the public or their politicians.
Much of the expenditure goes towards France’s extremely generous and highly protected system of old-age benefits. France watchers will recall that in 2023, Macron instituted a package of reforms aimed at addressing the country’s spending habit and flatlining productivity. Under the measures, the retirement age will gradually increase from 62 to 64 by 2030, and to receive your full state pension, you will have had to work for 43 years, up from 42. As they often do, the French took to the streets to demand that this generational injustice be stopped. This is despite the fact that France still has one of the lowest retirement ages in Europe, and a state pension that is one of the highest relative to the cost of living.
Right, so we’ve got a European country spending beyond its means, forking out a fortune on paying back its debt and a population who demand an ever-growing amount of benefits. Sacre bleu, they’re just like us.
In some respects, our situation is not yet quite as dire as France’s. Interest repayments on France’s debt are estimated to be a painful €67 billion for this year. In the 12 months to June 2025, we spent £16.4bn on our debt interest – but it should be added that this was nearly double the amount we paid at the same point last year. Whereas France’s debt stands at 114.1% of GDP, ours stands at 96%. Though the International Monetary Fund estimates that without spending restraint, our debt will reach 101.3% of GDP by 2034/35, a figure which would tempt a default.
Though I’m sure they’d hate to admit any point of similarity with their French counterparts, when it comes to public spending, the British public are comparatively demanding. The triple lock on state pensions in the UK – by which the state pension rises annually by inflation, average earnings or 2% – is wholly unsustainable. Since it was introduced by the coalition government in 2010, the system has cost taxpayers £78bn. By 2034, it is estimated that it will cost an extra £10bn annually.
When Labour tried to reform just one aspect of our old-age benefits system – proposing that eligibility for the Winter Fuel Allowance be limited – Britain’s biddies were furious. At least Macron had the stones to weather the unpopularity and force his pensions changes into law. Our Government u-turned at the first sign of resistance, and reinstated winter fuel payments in full for 75% of pensioners, the cost of which is put at £1.25bn. And for what? The pensioners still think Keir Starmer’s a back-stabber and won’t go near him at the next election.
The historic unwillingness for centrist governments to stomach the short-term political hit of putting the country’s fiscal affairs on a long-term stable footing has thrown politics in the UK and France into disarray.
With National Rally topping the opinion polls and Macron’s government in chaos, Marine Le Pen is now calling the shots in France, and confidently setting out a strategy for economic renewal. Look around us in Britain. The impotence of the political mainstream in taking on vested interests and thinking radically about solving our problems has allowed Nigel Farage and Reform UK to surge and occupy the public’s imagination. Almost three quarters of Britons now think that Reform are doing ‘the most to set the political agenda in the UK’.
It feels like wasted breath, but if Labour want to avoid a French-style future of revolving political crises and international economic embarrassment, they have no choice but to listen to the pro-growth influences in their party and make the tough decisions necessary on public spending.
The same goes for the Tories. If our oldest political party wants to claw its way back to relevance, Kemi Badenoch needs to get in front of the nation’s cameras and start laying out a coherent economic agenda. Reform still have some way to go when it comes to their fiscal plan, but they’re evidently starting to take policy very seriously.
The next general election will come around quickly, and if Britons open their wallets and turn on the TV only to discover that they are just as poor after a Labour government as they were under the Tories, the duopoly which we all assumed would last forever will be put swiftly to bed.
