How France has become the 'sick man of Europe' under Macron and faces an economic disaster

Emmanuel Macron is facing a political crisis as France hurtles towards economic disaster and the streets pulsate with hundreds of thousands of furious student rioters.

But the financial and social chaos gripping his country has not stopped the French president from taking a swipe at Britain.

Speaking in Madrid during a state visit last week, the 48-year-old leader described Brexit as the 'biggest lie of the last 30 years' and highlighted the UK's on-running battle to curb immigration since the 2016 referendum.

'Brexit is the biggest lie of the last 30 years. Those who said, "we'll be richer" – eight points less of GDP ten years later,' Macron said.

'Who said, "we'll solve the problem of immigration" – it's more complicated than before. And who said, "we're going to be a huge success in international trade" – it's even worse.'

Smirking, Macron jokingly said 'Welcome back' in response to Andy Burnham declaring that Britain should consider options for its future relationship with the EU, including rejoining the bloc.

But as the French president continues to take aim at the UK, investors have branded France 'the new sick man of Europe', selling off government bonds as the country’s debt crisis deepens.

At the same time the country is being convulsed by deepening student unrest that has seen schools burnt and education staff attacked.  

 On Tuesday, 250,000 pupils, teachers and parents demonstrated across France on the biggest day yet of a campaign for better high school conditions, amid teacher shortages and dilapidated infrastructure caused by chronic underinvestment.

Demonstrators let off flares, set buildings alight and hurled rocks at police officers, calling for urgent action over run-down classrooms, overloaded timetables and school buildings incapable of coping with rising temperatures.

The union for secondary school students, which is one of the major organisers of the protest, said 2,000 high schools have shut across the country.

Since the protests began mid September, a staggering 6,547 people have been arrested or stopped by police, who, covered in body armour have used shields, batons, pepper spray and tear gas to push back demonstrators.

About 300 students and staff have been injured, as have some 700 police officers.

The co-secretary general of France's main high school union, Syndicale Lyceenne, has warned that protests will only escalate as long as students 'are not listened to'.

Marius Mesnil told local broadcaster BFMTV: 'It shouldn't be up to us high school students to block high schools, to go and demonstrate by the hundreds of thousands in the streets to study in normal premises.

'The government has been trying to make us believe in recent days... that the movement has lost steam. Today we see the opposite.'

The nationwide demonstrations come as the euro tumbled to a 17-month low, with mounting budget worries in France stirring fears of a new debt crisis in the single currency zone.

Europe’s second biggest economy is being targeted by bond investors and concerns are growing that the danger may spread.

That sent the single currency sliding to less than $1.12 versus the dollar, the lowest since May 2025.

The euro has also fallen sharply against the pound, with sterling jumping above €1.18, close to its highest level since summer last year.

France is caught between the demonstrators on the streets demanding more funds from the government, and 'bond vigilantes' in the markets, who punish perceived fiscal irresponsibility by betting against the country’s debt.

It is being targeted by those vigilantes, who fear its public finances may be spiralling out of control amid political paralysis and a looming presidential election next year. 

 A sell-off of French bonds last week widened the gap in borrowing costs between France and Germany to levels not seen since the eurozone’s debt crisis in 2011.

This ‘spread’ is seen as a gauge of the risk premium that investors demand to hold French debt.

Hauke Siemssen, strategist at Commerzbank, said: ‘Latest bond market dynamics are increasingly concerning and somewhat reminiscent of a sovereign debt crisis. The (French) spread sell-off seems to increasingly feed on itself, creating a dangerous market backdrop.’

Kathleen Brooks, research director at XTB, said: ‘France is the epicentre of the concerns, however, Spain is also set to get ready for an early election, which is adding to investor worries.

‘All eyes will be on any signs of contagion in Europe’s bond market. The question now is, will Spain be next? Europe is out of favour with investors and bond market vigilantes are watching developments in the Eurozone closely.’

The crisis comes after France’s prime minister Sebastien Lecornu last week unveiled plans for tax rises and spending cuts in a budget that will struggle to win approval from a divided parliament amid growing public disquiet over the cost of living.

Even that plan would make minimal headway in shrinking the country’s annual deficit - and populist candidates of the far left or far right could make things even worse after next year’s vote.

Charlotte de Montpellier, senior economist at ING Bank, said France still had strengths including its nuclear power and defence industries – but admitted the fiscal situation was worrying.

‘Not everything is dark but I would say that France is definitely in a dark situation right now. It doesn’t mean that it will be like that forever but it will need to have a big reform in order to solve the current situation,’ she said.

De Montpellier said there was a risk of ‘contagion’ to neighbouring countries as Europe enters budget season.

She added: ‘I don’t think we are going into a public debt crisis but the risk has increased.’

 Burnham said in an interview broadcast last week that rejoining the EU was among the potential answers to the unavoidable question of what Britain's future relationship with Europe could look like. 

Responding to the announcement, Macron said that 'Andy Burnham is right to have this boldness,' while also pointing to the limits of the UK seeking closer ties with the EU while remaining outside the bloc, a decade after the Brexit vote.

'You cannot choose between the freedoms of the union and decide to take what suits us and not the rest,' he said.

Sanchez took a similar position, calling Brexit 'a huge loss, both for the British population and for the whole European project'.

Burnham's comments came after he told his ruling Labour Party's annual conference that he would set out 'different options' for future ties with the European Union closer to a planned summit with the bloc later this year.

But the British prime minister has faced backlash after hinting at rejoining the EU, with Scottish Labour leader Michael Marra warning that rejoining the bloc is 'unrealistic'.

The stance also represents a dramatic U-turn for Burnham, who told a conference in Leeds in May: 'I am not proposing that the UK considers rejoining the EU.

'I respect the decision that was made at the referendum, and it is going to undermine everything I have said about strengthening democracy if we don't respect that vote.'

The prime minister told the BBC he did not want to leave the issue 'hanging' and he wanted to be clear on 'where we want Britain to go in the next decade'.

Asked whether he wanted the UK to rejoin the bloc, Burnham told Radio 4's Today programme he wanted to 'look at the options'.

He added: 'We could stay as we are. That's definitely an option, if people think this is the right place to stay,' he told the programme.