France is sinking down the European Union‘s wealth list and risks acquiring “third world status”, a former civil servant has warned. Once among Europe’s richest nations, France has firmly dropped into its second tier after recording three consecutive years of per capita wealth below the bloc’s average of 100, according to Eurostat data. It has fallen far behind Germany, formerly its economic equal, with a per capita wealth of 111, and even dropped behind the UK, at 99 and 98, respectively.

Italy, which was 10.1% poorer than France in 2020, has also caught up with its economic rival, with GDP per capita at $59,453 (£43,413) in Italy and $59,683 (£43,581) in France as of 2024. Nicolas Baverez, a former senior civil servant, warned that his country had entered an “infernal spiral”, dubbing it the “Argentina of Europe” in an article for Le Figaro, in a nod to the South American nation’s long-term economic instability.

He wrote: “Our country has become the Argentina of Europe. France is shut in an infernal spiral that is leading it to third-world status.”

Law professor Frédéric Douet also warned that “costly and inefficient” policies would trigger a “slow pauperisation” of France.

“The mantra of our technocrats and politicians is that tax rises resolve our problems,” he warned in Le Figaro.

But this week’s budget also shed light on the deep divisions in France’s fractured parliament, as evidenced by its difficulty reaching a compromise and by Prime Minister Sebastien Lecornu being subject to two votes of no confidence on Monday.

With no parliamentary majority, he was forced to grant concessions to the Socialist party, including suspending President Emmanuel Macron‘s unpopular raising of the pension age from 62 to 64.

France has the second-largest economy in the EU but is attempting to plug a budget deficit of 5% of GDP, with public spending set to drop slightly from 56.8% to 56.6% this year.

Businesses will have to shoulder several tax rises following the budget, including an extra levy on profits generated by large companies, which is set to raise $7.3 billion (£6.3 billion) in 2026.

But the national debt, currently at €3.4 trillion (£2.9 trillion), is still expected to rise further this year after becoming the highest consolidated national debt in the EU in absolute terms last September.