The best way to measure if a country works well is to observe how much their debt valunts. Argentina is a paradigmatic case: a country with a default history and lack of credibility. If someone does not trust you, they hardly lend you money. Well, it happens the same at states level.
And although one would never expect something like that with France, reality shows that even great leaders can lose reputation and face financial difficulties. Although many may idealize France for their history, culture and social models; The markets evaluate it as a country and, if France were “working well”, its debt would not be in the situation it is. The debt reflects what investors think of the country: if they give it at a good price, they trust; If the cost is triggered, there is red alert.
In Argentina, investors demand high yields. This is a lack of credibility. The same applies to any other country: if a government spends more than it has and has no confidence that you can pay it, the markets react immediately. This logic is universal: as with a person, if you do not trust that you will return your money, you do not lend it; The same happens between countries.
Today, in 2025, the yields of the 10 -year bonds in France exceeded 3 %, dangerously approaching those of Italy, nothing less than their rival traditionally considered more risky. The difference, or Spredwith Italian bonds it is only 0.14 percentage points. This is unpublished from the global financial crisis. France ceased to be perceived as a “fixed” and stable lender. Public debt already exceeds 113% of GDP and projects to reach 118% in 2026. Moody’s has already degraded the rating of France; Meanwhile, S&P and Fitch maintain a negative perspective. Logic is clear: there is a structural imbalance. A state with so much social expenditure, as generous vacations, subsidies, privileges, among others, is without sustainable financing. To this is added that its leaders are only focused on winning the next election, and this erodes the confidence of the markets.
Greece faced its debt crisis between 2009 and 2018. The market lost confidence after revealing makeup data and a real deficit well above that declared. The interest rates of their bonds shot themselves, and needed international bailouts, including a Quita, a “Haircut”In jargon, 50% of its debt with private banks. Zambia, an African country, allocated in 2021 of the budget more at the service of its debt than to education, health, water and sanitation together. Another example of inverted priority, without credibility or sustainability. In many sub -Saharan countries there was a“ explosion of debt ”motivated by low rates and need for financing, which generated a vicious circle of high Interests and growing poverty.
If one of the EU pillars, such as France, loses credibility and becomes a doubtful borrower, a fundamental pillar of the European project falls apart. Germany, the other great support, also faces challenges: growing spending, gigantic climatic and social commitments, and a global situation that demands fiscal care. The EU tends to focus on tetopia -dyed debates: what would happen if such a climatic or social phenomenon occurs, without addressing real and pressing problems today. Meanwhile, it is spent without real political control to sustain it. The well -known perception that in France have six weeks of paid vacations can be cited. That is viable if there is fiscal sustainability, if French bonds are expensive, it means that others finance that lifestyle, and markets see it.
If governments do not act with fiscal responsibility, sooner or later investors receive it and adjust financing prices. Argentines and French suffer, although in different scales, the same logic: if you do not trust you, you pay more expensive or, worse, they leave you without credit. If France does not approve its fiscal package of € 44 billion by 2026, for lack of parliamentary majority, the market will punish without mercy. It is essential to recover credibility: reforms, fiscal discipline, transparency. Because, in the end, only this really influences investors.
How others value your debt is one of the most powerful and accurate ways to measure the real health of a country. France demonstrates it: a country of history, cultural wealth and symbolic value, can be judged by markets and find yourself in trouble if sustainability neglects. Argentina has even more obvious with the lack of credibility after its defaults. It is the usual reflection: loans between people, loans between countries: do not lend if you do not trust. And no one else sees it as clear as the debt price. That is the ultimate truth of the functioning of a country.
Things as they are
Mookie Tenembaum addresses international issues like this every week with Horacio Cabak in his podcast the international observer, available in Spotify, Apple, YouTube and all platforms.
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