How bad could things get in France?

It was a French politician, Valéry Giscard d’Estaing, who coined the term “exorbitant privilege” in the 1960s. He was referring to the benefits received by America as issuer of the world’s reserve currency—namely, the ability to run high deficits comfortably. These days France is reminded that it has no such privilege. Ahead of parliamentary elections on June 30th and July 7th, its hefty deficit and growing debt are central to the campaign. On June 19th the European Commission is expected to put France into an excessive-deficit procedure (EDP), the EU’s fiscal torture chamber, meaning that the country’s politicians will have to come up with a plan to fix things.

The commission’s officials have good reason to do so. France has an American-style deficit of 5% of GDP, which its central bank and the IMF expect to come down only slowly. The country’s debt-to-GDP ratio of 111% is similar to Italy’s before the euro crisis in the early 2010s, and is set to rise. S&P Global, a ratings agency, downgraded the French government’s sovereign-debt rating from AA to AA- on May 31st—before Emmanuel Macron, France’s president, gambled on snap elections that may bring the hard-right National Rally (RN) or the left-wing New Popular Front (NPF) to power, under his continuing presidency.