A ‘Doom Loop’ Threatens France as Populism Confronts Markets

When protests over high gas prices ripped through France in 2018, President Emmanuel Macron offered to enact about $11 billion in tax cuts and wage increases to try to quell the unrest.

Today, after protests over education turned violent, Mr. Macron is in no position to use money to bring calm to the streets.

That’s because the French government is also fighting the prospect of a crisis in its bond market. Investors have been dumping French debt, unsure of the government’s ability to manage its budget amid high interest rates and political uncertainty.

Announcing a big financial commitment to mollify protesters would likely rattle investors further and lead to another jump in the government’s borrowing costs. Mr. Macron, approaching the end of his time in office, is leading a centrist government without a governing majority. He is left in a tight spot: Both inaction and more spending could exacerbate France’s troubles and give populist politicians running for his seat next year a bigger opening to attract aggravated voters.

Article source: https://www.nytimes.com/2026/10/20/business/france-protests-bond-markets.html