France faces rising debt costs as interest rates climb

France is facing significant fiscal pressure as its public debt reached a new high of 3,536.1 billion euros in the first quarter of 2026, representing 117.5% of its GDP. This increase follows a rise of 75.6 billion euros in just three months.

The cost of servicing this debt has risen sharply, with interest payments increasing by 18.3% year-on-year to reach 34.5 billion euros in the first half of 2026. This surge is attributed to rising interest rates and the progressive renewal of maturing debt at higher rates. Reports indicate that France's 10-year borrowing costs have reached over 4.13%, which is higher than those of other Eurozone nations including Italy, Greece, Spain, and Portugal.

These financial conditions are complicating the preparation of the 2027 budget. The state's budget deficit for the first half of 2026 reached 106.8 billion euros, exceeding the levels recorded during the same period in 2025. Public Accounts Minister David Amiel has described the situation as a “warning shot” and has called for political compromise to manage the budgetary challenges.