Nobel laureate economist Paul Krugman warned that France's deteriorating public finances are on an “unsustainable path” and could trigger a debt crisis engulfing the Eurozone. In an article published on October 8, Krugman wrote: “The current situation in France is really worrying. In particular, this is not just France's own problem. France, as a member of the Eurozone, could erupt into an uncontrolled debt crisis, and such a crisis could disrupt European unity.” Krugman pointed out, “France has probably crossed the line from 'too big to be down' to 'too big to be rescued'. If the French crisis reaches its worst, it will cause serious divisions within Europe.” Krugman said that according to credit default swap pricing, the French default probability reflected in market prices is only 1.2%, but he thinks this probability is “too low.” “The sudden rise in the current CDS price of French government bonds is very worrying.”

Nobel laureate economist Paul Krugman warned that France's deteriorating public finances are on an “unsustainable path” and could trigger a debt crisis engulfing the Eurozone. In an article published on October 8, Krugman wrote: “The current situation in France is really worrying. In particular, this is not just France's own problem. France, as a member of the Eurozone, could erupt into an uncontrolled debt crisis, and such a crisis could disrupt European unity.” Krugman pointed out, “France has probably crossed the line from 'too big to be down' to 'too big to be rescued'. If the French crisis reaches its worst, it will cause serious divisions within Europe.” Krugman said that according to credit default swap pricing, the French default probability reflected in market prices is only 1.2%, but he thinks this probability is “too low.” “The sudden rise in the current CDS price of French government bonds is very worrying.”