International Monetary Fund Managing Director Kristalina Georgieva delivered a direct warning to France on Wednesday, urging the government to "bring your finances under control" as bond yields climbed and political instability deepened.
"What we see in France is a complication of, on one side, the consequence of borrowing shock after shock after shock, climbing on this staircase that does not lead to heaven, and on the other side, a political dynamic scene in France that creates more difficulties for the finance ministry to put a clear path for tightening," Georgieva said in a CNBC interview from Singapore.
Georgieva leads the 190-country financial institution and her assessments of national fiscal health shape investor confidence and policy across the developed world. France's deficit reached 5.1 percent of GDP last year, well above the EU's 3 percent reference level, triggering an excessive deficit procedure.
The stakes are visible in bond markets. Yields on France's 10-year government bonds have risen more than 100 basis points since the start of the year. Investors now demand higher yields for French debt than for Italian government bonds—a rare reversal that signals growing concern about France's fiscal trajectory.
The pressure reflects a collision of economic and political forces. The French government is pushing tens of billions of euros in spending cuts through parliament while violent student protests have entered their third week and the political landscape remains fractured.
Georgieva acknowledged the difficulty ahead. She reiterated her core message: "Yet again, my message is — get your house in order." The proposed fiscal adjustment would be "tough, no question about it," she said, especially against the backdrop of unrest.
She noted a structural challenge: populations have grown accustomed to government support during economic crises since the pandemic. Georgieva called for active communication from government, trade unions and the business community to explain why fiscal discipline serves the public interest.
On the broader European outlook, Georgieva said the continent is better positioned than during the euro zone debt crisis of the early 2000s, citing stronger European Central Bank support and a more mature financial system. But France cannot rely on those safeguards alone.
