France's Record-Breaking Debt Hits 119% of GDP, Election Candidates Scramble

France's public debt has reached a record high of 119% of its GDP, putting pressure on candidates in next year's presidential election to explain how they would tackle the issue. The country's debt-to-GDP ratio is now higher than it was before the COVID-19 pandemic and exceeds that of many other major economies, including Italy and Greece.

The debt has risen from 97.9% in 2019 to 119% at the end of June, according to figures released by France's National Institute of Statistics and Economic Studies. The total amount of public debt now stands at €3.596 trillion ($4.08 trillion), with a quarter held by French investors, a quarter by the Banque de France through purchases made under ECB monetary policy, and another quarter each by euro area and non-euro area investors.

Prime Minister Sebastien Lecornu has proposed reducing the deficit by cutting public spending, while radical-left candidate Jean-Luc Melenchon has suggested cancelling or freezing French government bonds held by the European Central Bank. ECB President Christine Lagarde has criticized this proposal as a breach of EU rules and warned that it could lead to costly terms for future creditors.