France's Mounting Debt Crisis: A Danger to Economic Stability

France's public audit office, the Cour des Comptes, has raised concerns about the country's growing public deficit, which reached 154 billion euros in 2023. The audit warns that increasing costs of public debt and lack of structural reforms leave France vulnerable to economic shocks. The political deadlock further complicates the situation.

France's public finances are under severe strain, with a deficit reaching 154 billion euros ($168 billion) in 2023, according to the Cour des Comptes, the national public audit office. The audit office cautioned that the euro zone's second-largest economy is "dangerously exposed" to potential macroeconomic shocks.

The audit follows a tumultuous parliamentary election that ended in a hung parliament. While no party secured an outright majority, the far-right National Rally (RN) and the left-wing New Popular Front performed notably, both advocating for substantial public spending increases.

Pierre Moscovici, head of the Cour des Comptes, emphasized the escalating costs of servicing France's debt, which he predicted will rise from 52 billion euros annually to 80 billion euros by 2027. With public debt soaring to 110.6% of GDP in 2023, the situation is further exacerbated by the EU Commission's warnings and potential disciplinary measures for budget deficits.

(With inputs from agencies.)