đ„đȘđș EU FISCAL CLASH: GERMANY PUSHES BACK ON FRANCEâS DEBT PLAN đ©đȘđ«đ·
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Tensions are rising inside the European Union after reports that German Chancellor Friedrich Merz rejected a proposal from French President Emmanuel Macron for the EU to issue joint bonds to support additional spending.
In simple terms: Germany does not want shared EU debt to cover costs that some countries â including France â may struggle to finance alone.
đ The Numbers Matter
Germanyâs debt-to-GDP ratio: ~65%
Franceâs debt-to-GDP ratio: ~120%
Franceâs debt load is nearly double relative to its economy compared to Germany. Berlin has traditionally taken a strict stance on fiscal discipline, and many in Germany fear that issuing more joint EU bonds could effectively make German taxpayers backstop higher-debt countries.
âïž Why This Is Bigger Than Politics
During the COVID crisis, the EU already approved common debt issuance for recovery funds â a historic step. Some leaders now see that framework as a model for future spending.
But critics warn it could evolve into a âdebt union,â where stronger economies repeatedly support more indebted members.
đ Market Impact?
The relationship between Berlin and Paris has long been the driving force behind EU stability. Any serious fracture between the blocâs two largest economies could:
Pressure the euro
Increase bond market volatility
Deepen political divisions inside the EU
Investors are watching closely. When Germany and France disagree, Europe feels it. đ¶đ„