Real interest rates too high for France’s stagnant high-debt economy
The curse of Europe’s one-size-fits-all currency union has struck again.
Real interest rates set by the uropean Central Bank (ECB) are too high for France’s stagnant high-debt economy.
At the other extreme, borrowing costs are too low for Portugal and Bulgaria, whose economies are overheating and property prices are surging at annual rates above 15pc.
The latest caretaker government has imposed a status quo budget by decree power, using the infamous Article 49.3 after it promised not to do so.
This tension is now pitting France against Germany.
“France has the highest level of public spending in Europe, the highest budget deficit in the eurozone and the fastest rising public debt,” said François Villeroy de Galhau, the governor of the Bank of France, speaking to the French senate.
Ambrose Evans-Pritchard Telegraph 27 February 2026
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