Part of the reason riots swept through Paris and other cities in France recently was a debate over funding of schools. Teachers noticed that a large portion of their pay was being diverted to fund civil servant pensions as schools struggled with teacher shortages.
The secret funding of pensions is likely just one slice of France’s budget woes as the country is increasingly mired in debt. The country’s pay-as-you-go social security system, Sécurité Sociale, is hemorrhaging cash with an annual deficit of €21.6 billion last year. Debt-to-GDP ratios have effectively doubled since 2000, going from 60 percent to over 120 percent.
But for a brief period after 2020, World Bank data for France showed a stark drop in debt of 25 percentage points between 2020 and 2022 as if the pandemic had turned Parisians into hard-nosed stewards of their finances.
Somehow those numbers were all wrong. Different sources for that data on debt-to-GDP ratios including the International Monetary Fund (IMF) and France’s Institut National De La Statistique Et Des Etudes Economiques (INSEE) show no such drop.
While other sources showed minor declines around that period and macroeconomic numbers are sometimes adjusted after the fact for accuracy, a 25 point adjustment would be unheard of.
It may be a technical issue only in the World Bank data where it appeared. At the moment, the World Bank no longer shows debt-to-GDP ratios at all for France.
U.S.-France’s Sympatico Debt Traps
One oddity of France’s debt, GDP, and debt-to-GDP ratios is that they parallel that of the United States distinctly. France and the U.S.’s ratios are almost completely in sync with a .996 Pearson correlation—which some have described as a result of both countries having the same debt trap, where both are mired in social spending and continually paying more and more interest on that debt, except that France’s private debt is twice that of the U.S.
Hopefully, we in the US are at the end of the now 60 year social reparations mission to right the wrongs of 250 years of institutional and cultural discrimination against anyone not white, male or landowning.