Hundreds of thousands of people across Europe have recently taken to the streets in protest at the rising cost of living, low wages, a housing crisis and underfunded schools and universities. Protests in France, Belgium, Italy and Portugal saw clashes, looting and arson, although many were peaceful.
The unrest has been greatest in France. According to its interior ministry, more than 550,000 people joined protests across the country last Saturday. The protests came amid weeks of student demonstrations over education and the cost of living.
The situation has put European countries’ debt problems and the financial strain on their governments back in the spotlight. After years of heavy borrowing, many governments are now caught deep in debt, while the cost of paying interest on it is rising.
How governments borrow
Governments borrow in much the same way as ordinary people. But instead of borrowing directly from banks, a government usually raises money by selling bonds.
In return for buying the bonds, the government pays investors interest and promises to repay the principal when the term ends.
A 10-year bond is a loan that a government repays after a decade. The bond’s ‘yield’, the return investors receive, is an important indicator of how much confidence the market has in a country’s management of its debt.
How government bonds work
1. The government borrows: an investor pays 100 euros to buy a 10-year bond.
2. The government pays interest: every year for 10 years the investor receives a fixed amount. At an interest rate of 2.5 percent, they receive 2.50 euros a year (25 euros in all). At 5 percent, they receive 5 euros a year (50 euros in all).
3. The government repays the debt: after 10 years the investor gets back the original 100 euros invested.
What happens when borrowing costs rise
When a bond’s price falls, its yield, or interest rate, usually rises. That makes new borrowing more expensive for the government.
Just as a family comes under pressure from its mortgage when interest rates are high, a government then has to spend more on interest. That leaves less money for essential areas such as schools, hospitals and roads.
Since the early 2000s, just after the euro area was created, 10-year borrowing costs for Europe’s large economies have never reached a level as high as 5 percent.
During the eurozone debt crisis of 2010 to 2012, struggling countries such as Greece, Italy and Spain had to pay 5 percent or more. Ireland and Portugal had to seek international financial assistance after their interest rates passed 7 percent.
The widening gap between French and German rates means investors are demanding a higher return for lending to France than to Germany, reflecting market concern about France’s public finances.
A comparison of government borrowing rates in the eurozone and Britain shows that France now pays more than even Italy and Greece. Only Britain, which is outside the euro, pays a higher rate than France.
Which countries owe the most
The United States has the largest government debt in the world, at $41.4 trillion, or 127 percent of GDP. China follows with $22.5 trillion and Japan with $8.7 trillion. Japan’s debt is 199 percent of its GDP.
France’s government debt is $4.2 trillion, or 118.5 percent of its GDP, making it the world’s fifth most indebted country by this measure. Italy’s debt is $3.7 trillion, but that is 138 percent of its GDP. Germany’s debt is $3.5 trillion, or 65 percent of GDP.
The International Monetary Fund (IMF) forecasts that France’s government debt could reach 121.8 percent of GDP by 2030.
$3.3 trillion a year on interest alone
According to the Institute of International Finance (IIF), the combined debt of governments, households and private companies worldwide rose by $10 trillion in the first six months of 2026 to more than $365 trillion.
That is equal to about $44,000 for every person on the planet. Much of the increase came from emerging-market countries.
Paying interest on this huge debt also costs vast sums. Over the past year, advanced economies spent more than $3.3 trillion on interest on government bonds.
That is more than the world spent on defence ($3.1 trillion), on artificial intelligence ($2.6 trillion) and on clean energy ($2.3 trillion).
The effect on ordinary people
When the cost of interest on government debt rises, there is less room to fund public services. Pressure can build to cut spending on schools, hospitals and pensions, and governments may also have to raise taxes to cover the shortfall.
The effect is not limited to government budgets. When interest rates on government debt rise, rates on mortgages, car loans and credit cards can also go up.
Ordinary people are then hit by both the rising cost of living and the funding squeeze on public services. This economic pressure is playing an important part in the recent protests across Europe.
The big challenge for governments now is to handle the growing cost of interest on their debt while keeping essential public services funded.
বাংলায় মূল প্রতিবেদন পড়ুন · Read the original Bengali report