France's Public Debt Hits Record High Amid Election Uncertainty

France's public debt has reached an all-time high under President Emmanuel Macron's two-term rule, causing concern among investors and emerging as a key issue in next year's presidential election. The country's debt now stands at 119% of its gross domestic product (GDP), with the government expecting it to grow to nearly 122% by the end of 2027.

Despite proposed spending cuts totaling 54 billion euros ($61 billion), France's annual state budget is expected to overshoot EU limits once again. Budget Minister David Amiel defended the cuts, stating that they are essential for addressing the country's fiscal challenges. However, critics argue that these measures may not be enough to bring the debt under control.

One proposal put forward by radical-left presidential candidate Jean-Luc Melenchon involves canceling French government bonds held by the European Central Bank (ECB) to free up funds for public spending. ECB President Christine Lagarde has rejected this idea, stating that it would be a 'pure violation' of the EU treaty and could lead to creditors demanding exorbitant terms or refusing to lend in the future.