For there to be a French public debt crisis, non-resident investors would have to be able and willing to switch to another euro-zone country’s public debt

Today, 53% of France’s public debt (i.e. EUR 1,640 billion) is held by non-residents. For a French public debt crisis to be triggered, these non-resident investors would have to be able to sell a large amount of French public debt and buy a large amount of debt issued by other euro-zone countries, since the arbitrage would essentially be between euro-denominated government bonds. The other euro-zone countries concerned must therefore have a large public debt, which limits the choice to Germany, Italy and Spain. Germany's net supply of debt is very small, given its restrictive fiscal policy, and a massive purchase of German debt would push Germany's long-term interest rate to an unacceptable level. Italy's public finances are worse off than France's, so it is highly unlikely that Italian debt will replace French debt in investors' portfolios. There remains the possibility of substituting Spanish debt for French debt. But while Spanish growth has been strong recently, Spain still has some worrying economic features: falling productivity, low employment rate, low skills, etc. It is therefore hard to see what debt could actually replace French debt.