Under Charles de Gaulle, France attained a reputation for monetary and financial stability, undergoing a profound economic transformation during Les Trente Glorieuses. His legacy was such that in the decade after his death in 1970, the French debt-to-GDP ratio hovered at around 20%. Nearly 60 years later, that Gaullist legacy of fiscal responsibility has become conspicuously absent.

As with many of its European counterparts, France now finds itself mired in a debt crisis. Public debt-to-GDP has doubled since 2008 and now stands at 120%, or €3.5 trillion. In a manner disturbingly reminiscent of the 2011-12 Eurozone crisis, “the spread” of French 10-year bonds over Germany’s, or the additional interest it pays to borrow compared to its more reliable neighbour, has widened to 1.4% — suggesting the higher risk that investors are now placing on lending to France. In comparison, Italy’s spread is only 1.1% while Greece’s is barely 1%.

It is far too easy to pass blame onto “perfidious” financial markets or bond vigilantes for driving the country’s debt trouble. The sharp rise in borrowing costs is a clear warning to French leaders to get the public purse in order. Yet the problem for the rest of Europe is that the financial trouble in which the country finds itself could have a domino effect. If investors are unconvinced by France’s ability to get a hold on debt and public spending, they may begin to lose faith in other highly indebted countries across the EU and, by association, other advanced economies such as the UK. Markets could even begin to stop treating government bonds as relatively risk-free, significantly raising the cost of borrowing across the bloc. France’s bond turmoil has already had a negative impact on the euro, which this week fell to a 17-month low.

Certainly, the suggestion by presidential hopeful Jean-Luc Mélenchon for France to throw 18% of its debt “into the fire” — in other words, to default on it — could cause a wider financial crash. Such a default would open the possibility of further debt cancellations across the euro area, as well as a huge loss in the European Central Bank’s (ECB) balance sheet. This would likely result in a market-led fire sale of bonds and a significant rise in borrowing costs.

Some have suggested that the ECB should rush to the aid of Emmanuel Macron’s beleaguered government by buying up government bonds, which would push down the cost of borrowing. But this is the wrong approach, and would likely leave de Gaulle turning in his grave. The ECB should not save governments from fiscal headaches of their own making, incentivising profligacy. Instead, the solution for France and across Europe is to ensure sovereign states act responsibly by getting their fiscal ledger in order.

While citizens naturally have a right to adequate provision of public services, many in France and elsewhere on the continent have become too accustomed to the state’s succour. France has an overly generous pension system, as well as high spending on healthcare, unemployment benefits and education. Elevated long-term interest rates, meanwhile, will continue to act against the country’s already-anaemic growth rate. Without steely reform of fiscal policy then, the prospects look bleak.

Changing course is not easy, and typically such a volte-face requires a national crisis, yet the political will to change is still severely lacking. France has not balanced its budget since 1974. Given finance minister Roland Lescure’s budget proposal, the country looks set to continue with significant fiscal deficits for the rest of this decade. Mélenchon’s ridiculous suggestion to cancel debt has only fuelled further upset in the bond markets, while Marine Le Pen remains stubbornly committed to lowering the country’s retirement age.

Few are treating this crisis with the appropriate seriousness, or indeed the responsibility for Europe that France has historically felt. In July, the International Monetary Fund rightly called for a multi-year debt consolidation plan. France should get to work on this, and kick off with an immediate and significant reduction in the planned deficit for 2027 of 3% or less, not 5% as Lescure currently suggests.

French politicians can no longer afford to kick this can, as they have practically run out of road. The country has always been central to the European project; but should it continue on the path of fiscal incontinence, it could bring down its closest neighbours with it.