"Put Your Accounts in Order": The IMF Scolds France on Its Record Debt

You were singing? I am very pleased. Well then! Dance now. The ant from Jean de La Fontaine is now called Kristalina Georgieva and leads the International Monetary Fund. She delivered a message on France's debt this Wednesday, October 7, in Paris, one that the institution usually reserves for capitals that the Muggles consider more distant. Not at all. Let’s put your accounts in order.

The timing is well chosen. High school students and university students have been protesting for three weeks. Parliament is beginning to review a budget for 2027 with 54 billion euros in efforts. And France is now borrowing at the same rate as Italy.
Key points of this article:

• Kristalina Georgieva, the IMF director, has issued a warning to France regarding its high debt, comparable to the practices of more distant countries.
• France has borrowed at unprecedented rates since 2002, matching those of Italy, with difficult adjustment prospects and a risk of further rate increases.

French Debt: A Staircase That Does Not Lead to Paradise

Speaking to CNBC, the IMF Managing Director described a France that borrows "shock after shock after shock" and climbs a "staircase that does not lead to paradise". Led Zeppelin fans will appreciate the reference, while holders of OAT (French government bonds) may not.

The numbers support her claim. The 10-year rate hit its highest since 2002 at the beginning of October, close to 5%. Reuters reported it at 4.90% this Wednesday morning, up 15.6 basis points during the session. The Italian bond of the same maturity showed exactly the same yield. The gap with Germany has risen to 139 basis points. It had exceeded 158 points on Friday, its highest since late 2011.

The stock follows. Insee counts 3,595.5 billion euros of public debt at the end of June, which is 119% of GDP. The deficit reached 5.1% in 2025 and is expected to be 5.4% this year. The government of Sébastien Lecornu promises a return to 5% in 2027.

"Bond markets react to fundamentals, and the fundamentals have changed"

The bill is already coming due, with 59.3 billion euros in interest to be paid in 2026.

The Salvadoran Straw and the Beam of French Debt

This is where the matter becomes tasty. On October 1, six days before scolding Paris, the same IMF validated the review of El Salvador's program and unlocked 138 million dollars. It also granted exemptions for unmet criteria on bitcoin accumulation. Nayib Bukele had, however, years of tussles with the Fund behind him.

Look at the report card of the presumed bad student, as drawn up by the IMF itself: a 4.5% growth expected in 2026 and a projected public debt of 85% of GDP. France aims for 1% growth and carries 34 points of additional debt, with a deficit exceeding 5%. There has been much laughter at the small country that played its finances on bitcoin.

Greece Borrows Cheaper Than France

The laughter is less well received on the European side. Athens borrows around 4.45% for ten years according to Boursorama's report of the day, which is significantly less than Paris, and Rome is now on par. Greece, which the eurozone urged to tighten its belt fifteen years ago, with Paris's strong blessing, is financing itself at a better rate than its former teacher of austerity.

Rates as of October 7, 2026, for France, Italy, and Greece (Reuters, Boursorama), average yield of bonds in dollars as of October 2 for El Salvador (Cbonds index). Balances and debts: Eurostat (April 2026) and IMF. Since the end of 2025, French debt has risen to 119 % of GDP by the end of June 2026 (Insee), and the IMF projects that El Salvador's debt will reach 85 % in 2026.

Why France is Not Greece, and Why the IMF is Still Concerned

The comparison has its limits. Kristalina Georgieva herself raises these when asked if the French bond market is replaying the sovereign debt crisis. "The French economy is growing," she replies, and Europe has a "much more mature" system than at that time, with the power of the ECB in support.

El Salvador, on the other hand, has a GDP of $39.4 billion, barely over 1 % of the French economy. It is dollarized, has no central bank to buy back its debt, and that is why it accepts the IMF's conditions in exchange for $1.4 billion. No one will demand a list of reforms from Paris in exchange for a check.

That’s the honesty of the situation. But creditors look at the trajectory of a debt before the rank of the one who bears it, and France's trajectory is rising. Kristalina Georgieva does not hide that the climb will be steep. Since Covid, she explains, citizens have become accustomed to seeing the state "rushing to the rescue" of households and businesses at every crisis. Asking them for savings will therefore be "difficult, there is no doubt about it." She hopes that the government will not be alone in defending this effort, and that unions and employers will also explain what the country has to gain from it.

The Constitution gives Parliament 70 days to decide on the budget. Without a clear signal by then, Kristalina Georgieva warns, "we could see new increases" in rates. Emmanuel Moulin, the governor of the Bank of France, deemed the situation "serious" this Wednesday on France Inter, two days after describing in the Financial Times a country threatened to be "strangled by interest rates."

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