France remains trapped in a financial impasse, without budget and, soon, perhaps without government. Prime Minister François Bairou has called for a vote of confidence on September 8 and, with the Left and the Right parties, committed to throwing his government, on paper does not have the numbers required to survive.

On Tuesday, the Socialist party (Ps) added to the camp of disagreement, allying with their Green and the far -right National gathering.

In an attempt to prevent voting, Finance Minister Eric Lobar has publicly warned that the choice of the last solution, the appeal to the “world lender”, the International Monetary Fund, “is a danger ahead of us.”

Without the support of the Socialists, the center -right government of Bairou cannot stand. And there is a broad agreement between economists that the fall of Bairo will trigger further speculation about the health of the French economy and public finances.

At first glance, the situation of France does not seem dramatic. It is a pillar of the euro, its public debt is lower than the size of the economy than Italy and the cost of service of debt interest is clearly lower than that of the United Kingdom.

However, the picture changes if the two countries’ course is compared. Italy, with a debt of 135% of GDP, maintains strict control over its costs. Despite the low growth rates, which are not inferior to those of France, the European Commission’s forecasts show improvement for the following year, with low inflation and the deficit falling from 3.3% this year to 2.9% in 2026, that is below the 3% limit set by the Commission.

On the contrary, France sees the deficits swell, with forecasts showing that its debt will increase from 113% of GDP in 2023 to over 120% by the end of the decade, quickly closing the gap with Italy.

For international investors, what counts is not as much as its debt as its course.

Thus, although the cost of service of French debt remains relatively low, 3.5% for 10 years bonds, compared to 4.7% in the United Kingdom, is not as low as Italy. Even Greece appears with better performance than France.

According to European Central Bank data, Greece, although it has a debt of 158% of GDP, pays only 3.36% to 10 years bonds.

Emmanuel Macron has tried to convince the French that public finances need “severe surgery”, warning that “the times of abundance are over”.

Already, its most unpopular decision was to raise the retirement limit of 62, saying that higher pensions are a hindrance to state finances and deprive the economy of a specialized labor force.

François Bairou’s minority government intends to go even further, seeking savings of almost 44 billion euros to reduce the deficit from 5.8% of GDP in 2023 to 4.6% in 2026. The most controversial measures include the abolition of two national holidays.

The only realistic rescue route seems to be the reshaping of the budget to attract the support of the Socialists, which seems to be increasingly unlikely after months of negotiations.

According to analyst Joseph Dukeson of Jefferies, despite the fall in French banks, the impact of political uncertainty remains limited in the short term, with the highest risk of growth rather than state solvency.

Goldman Sachs analysts estimate that Bayrou may be forced to “relax” the target reduction of the deficit to rescue his government. However, a higher deficit would mean a further increase in the debt ratio to GDP and re -open the debate on a possible deterioration of France’s credit rating.

This would give a slight impetus to the economy, as a lesser decline in deficit next year would mean less fiscal pressure and have been positive for growth, since everything else remained stable, “they said.

“However, the strengthening of financial conditions and increased political uncertainty may work negatively for development. Overall, we estimate that growth will remain at 0.6% in 2025 and 0.9% in 2026, “they added.

These elements are ominous for Macron, who was committed to building a more dynamic economy with high growth rates.

With polls showing that few plans are gathering majority support in France, budget voting can be too long.