Will France blow up the euro zone? | The Economist

France faces a potential fiscal explosion that threatens the stability of the eurozone as political extremes propose economic programs centered on lowering the pension age despite massive budget deficits. The European Central Bank (ECB) now possesses more robust containment mechanisms than during the 2010 debt crisis, yet its willingness to intervene depends on France demonstrating "macroeconomic reasonability." A significant risk exists that a showdown between French political resistance and ECB fiscal discipline could undermine the monetary union's foundation, especially as populist sentiment in countries like Germany limits the political room for bailouts. While France may endure a bond market crisis similar to the UK’s "Liz Truss" moment, the historical precedent of countries like Greece suggests that the high domestic support for the euro eventually forces populist governments to move toward more sensible fiscal positions rather than risking a total exit from the currency union.