Khaberni - François Villeroy de Galhau, the Governor of the Bank of France, stated on Saturday that France is facing "gradual strangulation" due to debts with a substantial budget deficit currently at 5.4% of GDP.
Galhau added in an interview with "La Croix": "What threatens our country is not bankruptcy but gradual strangulation. First and foremost, there are increasing interests on sovereign debts, which reached 30 billion annually in 2020, and are expected to exceed 100 billion by the end of the decade. Then, a chain reaction impacts the costlier loans for households - mortgages - and for businesses. More importantly, the growing burden of debt we are handing down to our children and grandchildren."
Villeroy de Galhau confirmed that political and budgetary uncertainty negatively affects the French economy. He predicted economic growth to slow down this year to 0.7%. Additionally, he mentioned that budgetary problems undermine France's credibility internationally and raise "serious questions" from its partners, according to the Governor of the Bank of France.
The head of the Bank of France pointed out the need to reduce the budget deficit to at least 4.8% of GDP by 2026 to reach the target level of 3% by 2029. This will require increasing revenue and reducing expenditures.
At the end of September, the French National Institute of Statistics and Economic Studies (Insee) announced that the country's public debt exceeded for the first time in the second quarter of 2025 a record level of 3.4 trillion euros, reaching 115.6% of GDP.
French public debt is the third largest in the European Union after Greece and Italy. The institute notes that at the end of 1995, its value was only 57.8% of GDP.
In August, the former French Interior Minister Bruno Le Maire stated that France has never been this close to a financial abyss given the budget deficit and increasing public debt.
