France's budget crisis leaves government unable to meet protest demands
France's budget deficit hit 5.4% of GDP this year, leaving the government unable to fund the spending protesters are demanding.
Protesters are hurling rocks at police across Europe, but governments have run out of money to satisfy angry crowds. France is the clearest example.
France's budget deficit is 5.4% of gross domestic product, meaning a large spending gap. It's unlikely to improve as parties prepare for elections.
Belgium's deficit is 5.2%, Italy's is 3.1%, and Spain's is 2.4%. Government debts are even heavier: France's sits at 119% of GDP, Belgium at 110%, Spain at 101%.
While protesters demand tax hikes on the wealthy and more public spending, investors are growing wary. France's borrowing costs have climbed sharply, with yields on 10-year government bonds rising to nearly 5.1% and credit rating agency Fitch downgrading the country's outlook from stable to negative.
Even high-tax countries like France (where tax is 43.5% of GDP) can't collect enough to meet voter demands while growth stays weak and family incomes fall.
- 5.4 per cent of GDP
- France budget deficit
- 119 per cent of GDP
- France government debt
- Nearly 5.1 per cent
- France 10-year bond yield
- 43.5 per cent of GDP
- France tax rate
Why it mattersBudget crises in major economies can slow growth, affect currency markets, and influence global economic stability.
AustraliaEuropean economic slowdown could reduce demand for Australian exports and affect investment flows into Australia.
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