'It's unsustainable' Crisis hitting France is a predictable result of the global debt glut

Sébastien Lecornu’s abrupt resignation yesterday after less than a month as prime minister marked the latest clash between France’s stretched public finances and its polarised politics.

- Heather Stewart

Lecornu was the latest leader to fail to cobble together a package of spending cuts and tax rises that would pass muster in a parliament without a clear majority - and contain bond market pressures.

Emmanuel Macron, the president, is left with the choice of resigning himself or appointing yet another prime minister to try their luck with the political maths.

France’s travails are particularly acute but Macron is far from alone in trying to grapple with a mismatch between overstretched public finances and a weary electorate with little appetite for budget cuts.

Government bond yields, essentially the interest rate on a country’s debt, have been creeping up in many major economies amid concerns about tax and spending.

Yields on longer-term Japanese bonds jumped yesterday, with Sanae Takaichi, who is likely to be the next prime minister, expected to increase spending - despite national debt hitting 250% of GDP.

Here in the UK, the putative Labour leadership contender Andy Burnham was ridiculed by colleagues last week for suggesting the government should be less “in hock” to the bond markets. The Treasury is paying £110bn a year in interest to investors and yields have repeatedly shifted in response to policy moves - as well as global pressures.