Part 9/12:
Debt problems generally progress through three stages:
Growth through Borrowing: Countries borrow to build infrastructure, increase productivity, and stimulate economic growth.
Debt Sustainability Crisis: When debt levels become so high that new borrowing is only used to pay existing debts, not to fund growth. France’s current state fits this stage—a cycle of borrowing to avoid default.
Inability to Service Debt: When debt exceeds what can be borrowed, interest rates skyrocket, and default becomes inevitable.
France has moved into the third stage—its debt is not only overwhelming but growing faster than income, with no realistic way to service or reduce it without drastic measures.