France's Record-High Public Debt Sparks Election Fears

France's public debt has reached a record high under President Emmanuel Macron's two-term rule, raising concerns among investors and becoming a key issue in next year's presidential election. The country's debt now stands at 119% of its gross domestic product (GDP), with a total value of 3.596 trillion euros ($4.08 trillion) as of the end of June.

This is significantly higher than the 97.9% GDP ratio in 2019, before the COVID-19 pandemic. The country's strained public finances are likely to dominate the election campaign, with Prime Minister Sebastien Lecornu aiming to reduce the deficit by cutting public spending.

Radical-left presidential candidate Jean-Luc Melenchon has proposed canceling French government bonds held by the European Central Bank (ECB) to unlock money for public spending. However, ECB President Christine Lagarde has dismissed this idea as a 'pure violation' of the EU treaty, which bans central bank financing of national governments.