France’s economy has been trapped in dire straits. According to Prime Minister François Bayrou, the Damocles’ sword of public debt is hanging over the national economy.

The policymaker noted that France had never in its history faced such an enormous debt. However, the situation has now worsened seriously. François Bayrou acknowledged that the humongous public debt crippled the domestic economy. He has been leading the government for a month. The Premiere said that the debt had grown under every modern president of the fifth Republic.

According to estimates by Le Monde, France’s public debt currently stands at €3.3 trillion, compared to just €1 trillion in 2003.

Analysts at the international credit ratings agency Moody’s believe that the chance of the new cabinet achieving a stable reduction in the budget deficit is extremely low. Moody’s downgraded France’s credit rating at the end of 2024. Regarding the country’s economic outlook, the agency forecasts that France’s public debt will rise to 120% of GDP by 2027, up from the current 113.3%.

François Bayrou was appointed Prime Minister during a major political crisis in the country. In early December 2024, the French Parliament passed a vote of no confidence in Michel Barnier’s government, which had attempted to pass the social provisions of the 2025 state budget without parliamentary approval.

However, analysts point out that the country’s budget for 2025 remains unapproved. Bayrou has pledged to present his budget version to Parliament by the end of January.

In the meantime, France is operating under a special law that ensures funding for government programs within the parameters of the 2024 budget.