Part 4/12:
Since 2009-2010, France benefited from near-zero interest rates, facilitated by policies from the European Central Bank (ECB). However, the era of cheap borrowing is ending. Today, French debt interest rates have risen to around 3.3%, a dramatic increase from nearly zero. Short-term debt costs have surged as well, with 2-year French bonds now costing about 2%, and expected to go higher.
For a nation with colossal debt levels—currently over $3 trillion—such increases are catastrophic. Every percentage point rise in interest rates exponentially inflates repayment burdens, pushing France ever closer to default. For example, even a small increase in borrowing costs can amount to billions more in debt servicing costs yearly.