France's Debt Crisis Deepens as Budget Deficit Projections Hit 5% for 2026

France is grappling with a persistent debt spiral as fiscal challenges continue to mount for the Eurozone's second-largest economy. Recent projections indicate that the budget deficit is expected to stabilize at approximately 5% by 2026, remaining significantly above the EU's Maastricht criteria. Total public debt has now surged to nearly 115% of GDP, driven by high public spending which currently accounts for 57% of the national output. Despite various fiscal measures and tax increases, political paralysis has hindered the implementation of necessary structural reforms to the welfare state and bureaucracy. Analysts warn that the expanding state apparatus and lack of budgetary control are increasing sovereign risk for French assets. This fiscal instability is exerting downward pressure on the Euro and French equities, specifically impacting the CAC 40 index and government bond yields.