This chart explains the French debt crisis. Before the Great Financial Crisis, both France and Germany had debt/GDP around 65%. Germany remains near 64%, France is at 119%, the highest since 1946.

The gap is no longer just past and current deficits but the rising cost of carrying them. French interest payments are among the largest budget lines, rivaling or exceeding defence, and will keep rising as cheaper old debt is refinanced at today’s yields. Planned savings look real on paper, yet the interest bill will consume most of them before they improve the primary balance.

At the recent pace, several points of GDP a year amid weak growth and a deficit near 5%, 150% debt/GDP is not too distant. A recession, another geopolitical shock, or sustained higher yields would shorten the timeline sharply.

Markets’ loss of trust in France’s dysfunctional political system makes a bad situation worse. Even small reform attempts prompt unions to paralyze the country with strikes. The ECB will likely break its mandate again and monetize French debt, making eurozone savers and pensioners much poorer. Somebody will need to pay for lavish French pensions and absurd state spending. The French are unwilling to pay and hope the rest of Europe will sacrifice its prosperity to finance French retirees’ cruise-ship vacations.