Did you sing? I am very happy about it. Well ! Dance now. Jean de La Fontaine's ant is now called Kristalina Georgieva and heads the International Monetary Fund. This Wednesday, October 7, she sent a message to Paris on France's debt, one of those that the institution usually reserves for capitals that muggles consider more distant. Nope. Let’s put your accounts in order.
The timing is right. High school students and students have been demonstrating for three weeks. Parliament begins examining a 2027 budget involving 54 billion euros in efforts. And France now borrows at the same rate as Italy.
At the microphone of CNBC, the general director of the IMF described a France which takes “shock after shock after shock” and climbs a “staircase that does not lead to paradise”. Led Zeppelin fans will appreciate the reference, holders of OATs (French government bonds) a little less.
The numbers prove him right. The 10-year rate reached its highest since 2002 at the beginning of October, almost 5%. Reuters again raised it to 4.90% this Wednesday late morning, up 15.6 basis points over the session. The Italian bond with the same maturity showed exactly the same yield. The gap with Germany rose to 139 basis points. It had exceeded 158 points on Friday, its highest since the end of 2011.
The stock follows. INSEE counts 3,595.5 billion euros in public debt at the end of June, or 119% of GDP. The deficit reached 5.1% in 2025 and is expected to be 5.4% this year. The government of Sébastien Lecornu promises a return to 5% in 2027.
The bill is already arriving, with 59.3 billion euros in interest to be paid in 2026.
This is where things get sweet. On October 1, six days before lecturing Paris, the same IMF validated the review of El Salvador's program and released 138 million dollars. In passing, he granted exemptions for criteria not respected on the accumulation of bitcoins. Nayib Bukele, however, had years of standoff with the Fund behind him.
Look at the profile of the alleged bad student, as drawn up by the IMF itself: growth of 4.5% expected in 2026 and public debt projected at 85% of GDP. France is aiming for 1% growth and carries 34 points more debt, with a deficit greater than 5%. We laughed a lot about the small country that gambled its finances on bitcoin.
Laughter goes less well on the European side. Athens borrows around 4.45% over ten years according to today's Boursorama statement, significantly less than Paris, and Rome is now on par. Greece, which the euro zone ordered to tighten its belt fifteen years ago, with the strong blessing of Paris, is financing itself more cheaply than its former teacher of rigor.
The comparison has its limits. Kristalina Georgieva asks them herself when asked if the French bond market is replaying the sovereign debt crisis. “The French economy is growing,” she replies, and Europe has a “much more mature” system than at the time, with the power of the ECB in support.
El Salvador has a GDP of $39.4 billion, barely more than 1% of the French economy. It is dollarized, has no central bank to buy back its debt, and that is why it accepts the conditions of the IMF against 1.4 billion dollars. No one will demand a list of reforms from Paris in exchange for a check.
So much for honesty. But creditors look at the trajectory of a debt before the rank of the person carrying it, and that of France is rising. Kristalina Georgieva does not hide that the step will be high. Since Covid, she explains, citizens have become accustomed to seeing the State “running to the rescue” of households and businesses in each crisis. Asking them to save money will therefore be “difficult, there is no doubt about it”. She hopes that the government is not alone in defending this effort, and that unions and employers also explain what the country has to gain from it.
