Is Another Eurozone Debt Crisis Looming? - aei.org

WASHINGTON, DC—In 2010, a Greek sovereign-debt crisis roiled world financial markets. Now, France threatens to do the same, but on a larger scale. Not only is its public debt-to-GDP ratio edging up toward that of Greece on the eve of its crisis, but the French political system seems unwilling or unable to address the country’s gaping fiscal deficit. There is every reason to fear that a French sovereign-debt crisis would have global spillover effects. France is the European Union’s second-largest economy, with a debt many times the size of Greece’s circa 2010. Moreover, France’s debt problems are mounting at a time when bond yields in the United States, Japan, and the United Kingdom have all surged to multi-decade highs.