France's debt crisis threatens wider EU turmoil as Macron battles mass protests France is emerging as Europe's latest economic headache, with President Emmanuel Macron grappling with ongoing mass protests, rising borrowing costs and a debt crisis that could spill over into the eurozone. Hundreds of thousands have taken to the streets over rising costs of living, education and public services, as the government struggles to contain its budget deficit. According to Politico, France, the second largest economy in the European Union, is trapped in a cycle of fiscal and social crises. The public debt of 3.5 euros ($3.9) and the ongoing deficits have shaken investor confidence, raising borrowing costs. The spread between French and German 10-year bond yields jumped to 178 basis points, from 85 in early September. Prime Minister Sebastián Lecornos has proposed the 2027 budget already including €43 billion in savings, leaving little room to meet protesters' demands for another €10 billion in education funding. The government has also announced or floated limited aid measures: the release of strategic diesel reserves, subsidies for high-mileage drivers, a possible early increase in the minimum wage, talks with student union representatives, but the financial risks go far beyond France. Politico warns that the country could face an Italy-style debt crisis, reminiscent of 2011, when skyrocketing borrowing costs forced major fiscal reforms and a change of government. Former Italian Prime Minister Mario Monti warned that Frances' condition could deteriorate rapidly. A deeper French debt crisis could also raise borrowing costs in other EU countries, particularly Italy, as well as weaken the euro and put further pressure on the European Central Bank. Analysts at Oxford Economics have modeled a dire scenario in which both France and Italy enter recession in 2027. "France is on the brink of a financial crisis.

France's debt crisis threatens wider EU turmoil as Macron battles mass protests France is emerging as Europe's latest economic headache, with President Emmanuel Macron grappling with ongoing mass protests, rising borrowing costs and a debt crisis that could spill over into the eurozone. Hundreds of thousands have taken to the streets over rising costs of living, education and public services, as the government struggles to contain its budget deficit. According to Politico, France, the second largest economy in the European Union, is trapped in a cycle of fiscal and social crises. The public debt of 3.5 euros ($3.9) and the ongoing deficits have shaken investor confidence, raising borrowing costs. The spread between French and German 10-year bond yields jumped to 178 basis points, from 85 in early September. Prime Minister Sebastián Lecornos has proposed the 2027 budget already including €43 billion in savings, leaving little room to meet protesters' demands for another €10 billion in education funding. The government has also announced or floated limited aid measures: the release of strategic diesel reserves, subsidies for high-mileage drivers, a possible early increase in the minimum wage, talks with student union representatives, but the financial risks go far beyond France. Politico warns that the country could face an Italy-style debt crisis, reminiscent of 2011, when skyrocketing borrowing costs forced major fiscal reforms and a change of government. Former Italian Prime Minister Mario Monti warned that Frances' condition could deteriorate rapidly. A deeper French debt crisis could also raise borrowing costs in other EU countries, particularly Italy, as well as weaken the euro and put further pressure on the European Central Bank. Analysts at Oxford Economics have modeled a dire scenario in which both France and Italy enter recession in 2027. "France is on the brink of a financial crisis.