France's parliament begins debating the 2027 budget as high deficits, rising debt and student protests intensify pressure on fiscal consolidation. Many market watchers warn the euro zone's second-biggest economy risks a debt crisis that could drag the continent down unless it sustainably cuts its deficit, which has been among Europe's highest relative to GDP for nearly a decade under President Emmanuel Macron. Social spending, particularly on pensions and healthcare, remains well above peers, while weak growth has failed to offset it. Government borrowing costs have hit their highest level in nearly a quarter century, widening the bond yield gap with Germany and raising questions over whether the ECB would need to intervene. INSEAD professor Antonio Fatas says the ECB will not bail out France, though it would step in during a broader European crisis.
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