It's been bad news for François Bayrou. As France's new prime minister has been desperately trying to figure out how to balance the country's budget for 2025, he has found himself faced with a considerable rise in interest rates, further complicating the equation and adding to the debt burden, payments on which are a compulsory expense. And this may be just the beginning, according to some economists.

From less than 2.9% per year on the eve of Bayrou's appointment to Matignon, the prime minister's official residence, on December 13, 2024, the rates demanded by international investors on loans to France with a 10-year term rose to almost 3.45% on the financial markets on Friday, January 10.

Forced to take on debt to cover its public deficit, the French government will have to pay interest at a level not seen since October 2023. Between the mid-1980s and 2020, these rates fell steadily, from over 10% to 0%. They had even gone negative for a while. But, with the end of the Covid-19 pandemic and global economic recovery, the rates charged by banks started to rise again. Especially since the beginning of December 2024.

You have 73% of this article left to read. The rest is for subscribers only.