Part 10/12:
Japan, burdened with colossal debt, avoided default through aggressive central bank intervention, buying government bonds to suppress interest rates. However, France’s position is different. As part of the EU and using the euro, France cannot unilaterally have its central bank intervene without risking Eurozone-wide chaos. This fundamentally limits France’s options for immediate rescue.
The Economic and Political Toll: Austerity or Defaults
To address the crisis, France faces harsh measures:
- Raising Retirement Age: Currently around 60-62, there are proposals to increase it to 68 or even 70, a politically sensitive and unpopular move but possibly necessary to reduce pension liabilities.