France could be on the precipice of a financial crisis, as escalating student protests roiled an already shaky bond market.
A pre-election debt selloff, lame-duck government, and massive demonstrations have raised fears that Paris’ budgetary crisis is untameable. Presidential frontrunner Marine Le Pen vowed deep budget cuts Tuesday to lower the deficit, but has also pledged to increase retirement benefits.
“In France we have this reflex of always asking the state for a bit of magic money — to pay, pay, pay,” a centrist lawmaker told The Wall Street Journal. France would likely get a bailout in the event of default, one economist noted, “but it is not too big for the markets to punish,” a former European finance minister argued.
