Emmanuel Macron promised to act as a pragmatic moderniser and bridge France’s traditional left-right divide. Yet as John Ryan argues, the failure of Macronism now risks destabilising both France and Europe.
France is not a marginal economy struggling on the periphery of global finance. It is the world’s seventh-largest economy, the fourth-largest sovereign debt market and home to the fifth-largest banking system. Its size has long insulated it from the kinds of fiscal discipline imposed on smaller eurozone states.
Yet that insulation is now eroding. The combination of structural indebtedness, political fragmentation and the collapse of Emmanuel Macron’s self-styled “radical centre” has left France more vulnerable than at any point since the creation of the euro.
France’s debt metrics are stark. External debt stands at approximately $7.7 trillion, equivalent to around 248 per cent of GDP, while total debt across the economy is close to 319 per cent of GDP. Among advanced economies, only Japan exceeds this ratio.
The difference, however, is decisive. Japan’s public debt is overwhelmingly domestically owned. France’s is not. Roughly 54 per cent of French government bonds are held by foreign investors, exposing the state to shifts in international confidence that it cannot fully control.
For years, markets have tolerated this exposure. The assumption has been that France, as a core eurozone country, would always be protected by the European system. But that assumption rests on political as much as economic foundations, and those foundations are now visibly cracking.
Debt, the euro and the limits of sovereignty
Historically, large states facing excessive debt have relied on monetary sovereignty to escape fiscal dead ends. Inflation, generated through money creation, reduces the real value of outstanding debt and transfers losses from debtors to creditors. This strategy has been used repeatedly, and often successfully, by sovereign states with control over their own currencies.
France no longer has that option. Membership of the eurozone brings clear benefits in good times – lower borrowing costs, reduced currency risk and deep capital markets – but it also removes the ability to monetise debt in bad times. The euro is both a shield and a straitjacket.
This constraint became brutally clear during the eurozone crisis. Countries such as Ireland and Greece were forced into sharp fiscal adjustment because they could not print money to stabilise their economies. Instead, they relied on emergency support from the European Central Bank (ECB), conditional on austerity and structural reform.
France, however, is not Ireland or Greece. Its economy is far larger, its political weight far greater and its failure would represent a systemic crisis for the eurozone itself. This raises a question that European policymakers have so far avoided confronting directly: is France because of its core position in the eurozone too big to fail or is the scale of its debt exposure making it too big to save?
France is entering a period of acute fiscal and political vulnerability that is testing both domestic governance and the resilience of eurozone rules. These domestic tensions coincide with a deteriorating fiscal outlook. France’s budget deficit now exceeds five per cent of GDP, well above the EU’s three per cent reference value.
At the same time, French government bond yields have risen sharply, at points surpassing those of Italy and Greece. This reversal of France’s traditional status as one of the eurozone’s safest sovereign borrowers reflects declining investor confidence and raises questions about potential reliance on emergency mechanisms at the ECB.
The ECB dilemma
That said, for now this remains a French political crisis rather than a European financial one. The market has long since given up expecting meaningful progress on deficit reduction ahead of the 2027 presidential election. But a fiscal consolidation is obviously needed. The longer France delays the reckoning, the greater the adjustment that will eventually be required.
Since taking office, Emmanuel Macron has presided over an unprecedented expansion of the French state. By 2024, public spending had risen to more than 57% of GDP, the highest share among all OECD countries. What is most striking, however, is not France’s absolute level of spending but its growing divergence from its European partners.
When Macron entered the Élysée in 2017, France’s debt-to-GDP ratio stood around 11 percentage points above the eurozone average. By 2024, that gap had widened to roughly 25 points. The European Commission has estimated French public debt amounted to 116% of GDP in 2025, while the budget deficit is expected to be around twice the EU average, suggesting a pattern of sustained fiscal slippage rather than a temporary post-pandemic distortion.
Technically, the ECB has few hard constraints. Modern central banking operates on the principle that a central bank issuing its own currency cannot run out of money. The ECB can purchase sovereign bonds in unlimited quantities if it judges that doing so is necessary to preserve price stability or the integrity of the monetary union.
But capacity is not the same as willingness. The ECB’s interventions during the eurozone crisis were justified as exceptional responses to exceptional circumstances, tied to compliance with fiscal rules and reform commitments. An open-ended bailout of France – particularly under a government hostile to EU fiscal norms – would stretch that justification to breaking point.
This political dimension is crucial. Support for France has always been intertwined with the broader project of European integration. France is not simply another member state. It is one of the EU’s foundational pillars. If Paris is seen as committed to that project, solidarity is politically defensible.
The calculus changes, however, if France were to move decisively away from EU orthodoxy. A government led by National Rally president Jordan Bardella, for example, a known critic of Brussels’ interference in French politics, would place the ECB in an almost impossible position: forced to choose between financial stability and the credibility of the euro’s legal and political framework.
The collapse of the “radical centre”
France’s economic fragility is inseparable from its political crisis. In the space of less than two years, the country has cycled through five prime ministers, an unprecedented level of instability for the Fifth Republic. Each government has been weaker than the last, unable to command a durable parliamentary majority or articulate a coherent programme.
This is not merely turbulence. It is the disintegration of Macron’s central political promise: that a technocratic, post-ideological “centre” could overcome France’s traditional left-right divide. Macron presented himself as a pragmatic moderniser who would reconcile market efficiency with social protection and national sovereignty with European integration.
That project depended on the existence of a stable centre ground and on the belief that politics could be reduced to management. Both assumptions have proved illusory.
Macron’s rise hollowed out the traditional parties of left and right without replacing them with a durable governing coalition. His movement functioned less as a party than as a personal vehicle, sustained by his authority rather than by shared ideology or grassroots organisation. As his popularity has declined, that structure has collapsed.
At the same time, his policies have alienated nearly every constituency. To the right, reforms appeared hesitant and over-regulated. To the left, they were experienced as an assault on labour protections and democratic accountability. By trying to satisfy everyone, Macron ultimately has satisfied no one.
Implications for Europe
The deeper problem is that the technocratic centre lacks a moral anchor. Its claim to pragmatism masks a consistent bias towards preserving existing economic hierarchies. Market “confidence” has been prioritised over social cohesion, fiscal rules over political consent.
The language of reform has come to mean the dismantling of social protection. Competitiveness has meant wage restraint. As living standards stagnate, public services deteriorate and the cost of living rises, trust in institutions erodes. In that context, political extremes do not create instability, they feed on it.
The result is a vicious circle. Each failed government deepens public cynicism, fragments the political landscape further and increases the appeal of parties promising rupture rather than compromise. Macronism, designed to stabilise the system, has instead accelerated its breakdown.
France’s crisis is no longer a purely domestic affair. It poses a direct challenge to the eurozone’s institutional architecture and to the ECB’s role within it. A large, indebted state without monetary sovereignty, governed by a fragmented and delegitimised political centre, is a systemic risk.
European policymakers have relied for too long on the assumption that France would always anchor stability. That assumption is no longer safe. The question is not whether France will face a reckoning, but how – and whether Europe’s institutions are prepared for it.
Note: This article gives the views of the author, not the position of LSE European Politics or the London School of Economics.
Image credit: European Council provided by Shutterstock.
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