Part 7/12:
If the ECB intervened heavily to buy French bonds, it would devalue the euro, risking economic instability across the entire Eurozone. Other member states may be unwilling to bear the costs of rescuing France—causing a political and economic stalemate that could accelerate France’s decline.
The Potential for Euro Devaluation and EU Collapse
Furthermore, France’s massive size—second only to Germany in the EU—means its financial health directly impacts the broader European project. If France defaults and the ECB tries to intervene by purchasing bonds en masse, it would threaten the stability of the euro and could lead to a break-up of the Eurozone itself.