France's Soaring Public Debt Sparks Election Fears

France's public debt has reached a record high under President Emmanuel Macron's two terms in office, sparking concerns among investors and emerging as a major issue in next year's presidential election. The country's debt-to-GDP ratio stands at 119%, with the total value of loans reaching €3.596 trillion ($4.08 trillion) by the end of June.

Prime Minister Sebastien Lecornu plans to unveil the 2027 draft budget on Thursday, aiming to reduce the deficit through cuts in public spending. However, his proposal has been met with widespread criticism across the political spectrum.

Radical-left presidential candidate Jean-Luc Melenchon has proposed canceling French government bonds held by the European Central Bank to unlock money for public spending. ECB President Christine Lagarde rejects this idea, calling it a 'pure violation' of the EU treaty and warning that creditors could demand exorbitant terms or refuse to lend.

The French state's expenditure is expected to reach €77 billion in interest costs alone next year, diverting funds away from essential public services. Credit rating agency Scope downgraded France's long-term ratings in September due to rising debt and deficits.