a mini study on french government debt

Oct 11 edits: Financial times reported that China, is similarly seeing high central debt to GDP rate. The tax revenue is going to be slower because of low domestic spend. If the engines of the world, US, Japan, China, EU are all entering a stage with debt issues: how will the world get out of this? Can we "grow out of the debt", like Bessent said?


I read about WSJ report on a looming French debt issue, and decided to look deeper into this problem. The numbers research are assisted by AI. This is, at its best, just an exercise jogging down raw numbers and trying to understand the problem of government debt, using France as an example. 

Size of the problem

  1. The magnitude of French government bonds maturing on 2030 tops 285b EUR. It will rise sharply from 60b EUR in 2026 to 203.7b EUR in 2027 [4]. Totaling 1 trillion USD in debt due by 2030. [1] [4]
  2. A deeper look into French income statements [2]
  • 2a: Revenue by categories (in 2025). 
    1. Total = 1,561B EUR.
    2. Taxes = 882B EUR (57%)
    3. Social contributions = 446B (29%).
    4. Sales and other production revenues = 130B (8.4%). 
    5. Property income = 23.4 (1.5%). 
    6. Other revenue = 86.1B (5.5%)
  • 2b: Spending by categories (in 2024)  [3]
    1. Total = 1,672B EUR. 
    2. Social benefits = 694B (41%, pension accounting for 394B)
    3. Health care = 261B (15.6%)
    4. General public services and debt service = 181B (10.9% in 2024, 64.7B dedicated to debt service in 2025) 
    5. Economic affairs=166B (6.7%)
    6. Education = 149B (8.9%) 
    7. Defense = 54B (3.2%)
    8. Public safety = 52B (3.1%)
  • 2c. Who owns the government debts? [4]
    1. Non-resident investors: 57.5% (rising from 50% from December 2022)
    2. French “others”: 20.6% (Banque de France, ECB bond-buying programmes, takes ~18%)
    3. French banks: 10.5%
    4. French insurers: 9.6%
    5. French investment funds: 1.8%
  • Reasons: 
    1. continuous crises (pandemic, the war in Ukraine) increased government spending.
    2. The parliament is not set up to reduce government spending - politically painful and dysfunctional. 
    3. The economy has been slow - lower tax revenue than expected.
  • Results: 
    1. There will be a 59% surge in debt service by 2030. The debt to GDP ratio is 119.0% (€3,595.5bn) at end-Q2 2026. [5]
  • Potential path forward: 
    1. Cut spending: will the government pull this off?
    2. Increase tax revenue: will the economy be stronger to increase the tax base?
    3. Default: will this happen, under the framework of ECB?
    4. Bail out from European Central Bank

    Source: 

    [1] Wall Street Journal 'After Years of ‘Magic Money,’ France Becomes a Debt Bomb'.

    [2] INSEE https://www.insee.fr/fr/statistiques/8956575

    [3] INSEE  https://www.insee.fr/fr/statistiques/8735252

    [4] AFT Monthly Bulletin, August 2026 (holders, debt stock, redemption schedule)

    [5] INSEE https://www.insee.fr/fr/statistiques/9053525