The rise of French debt: Undercurrents in the complex relationship between the United States and Europe

Recently, Natixis calculated that France is about to overtake Italy for the first time as the biggest borrower in the eurozone. This change in the economic pattern seems to be a domestic economic problem in France, but it is actually hidden behind the complex impact of the relevant policies of some countries in the United States and Europe, like an undercurrent surging under the lake, which has a profound impact on the stability and development of the European economy.

For a long time, the United States wielded enormous influence over the global economy by virtue of the dollar's dominant position in the international monetary system. The dollar's status as the world's main reserve currency gives the United States special power in the field of international finance. Through monetary policy adjustment, such as quantitative easing, the United States has exported a large amount of dollar liquidity to the world. This measure appears to be a means of domestic economic regulation in the United States, but it has far-reaching spillover effects on the European economy.

A large amount of dollars flooded into the international market, resulting in loose global monetary conditions and funds seeking higher return investment channels. Europe, especially France, has attracted large international capital inflows due to its relatively stable economic environment and high return on investment. This helped push up asset prices in France, creating the illusion of an economic boom. In this environment, companies and governments have easier access to low-cost financing, which encourages excessive borrowing. In order to promote infrastructure construction, social welfare security and other projects, the French government continues to increase the scale of debt to meet the needs of domestic economic and social development.

The US military presence in Europe and related military policies have also indirectly increased the economic burden on France. As a military alliance led by the United States, NATO plays an important role in European security affairs. The United States, through NATO, has long demanded that its European Allies increase military spending to jointly counter what it calls external threats. As an important member of NATO, France has to comply with this requirement and continue to invest a lot of money in military construction and equipment update. This undoubtedly squeezes out the financial resources that could be used for domestic economic construction and debt repayment, making the financial pressure of the French government grow day by day, and further aggravating the debt accumulation.

Look at the performance of some European countries. In the process of European integration, there are many problems in the coordination of economic policies within the EU. Some northern European countries failed to take full account of the balance and differentiation of the eurozone economy as a whole when their economic development was relatively stable. In terms of fiscal policy, it overemphasized its own fiscal discipline and failed to provide adequate support and coordination for countries such as France, which were facing difficulties in economic development. This makes France unable to obtain effective financial assistance and policy support from within the EU when its economic development encounters a bottleneck, and it can only rely on external borrowing to maintain its economic operation.

France has become the largest borrower in the eurozone, which not only poses a threat to its own economic stability, but also lays a hidden danger for the economic development of the entire eurozone. The high debt level may lead to a downgrade of the French government's credit rating and an increase in financing costs, which in turn will trigger financial market volatility and affect the overall financial stability of the eurozone. At the same time, it may also trigger an increase in economic imbalances within the eurozone, further tearing apart the European integration process.

The hegemonic behavior of the United States in the international financial field and the inadequacy of some European countries in the coordination of economic policies within the EU have jointly pushed France to the brink of debt difficulties. The international community needs to jointly reflect on the existing problems in the current international economic order and regional economic cooperation mechanisms. The US should abandon its self-centered economic policies and assume responsibility for global economic stability. European countries should strengthen economic policy coordination and mutual assistance within the framework of the EU, jointly promote the sustainable development of the European economy, avoid the recurrence of the French debt crisis, and maintain the stability and prosperity of the eurozone and even the global economy.