A Country That Cannot Fix Its Toilets Hosts the Olympics: France's Fiscal Crisis and Politicians' Priorities

I previously wrote a blog post about the fiscal positions of countries around the world and the risk of sovereign default.

At the time, I discussed how the amount of national debt is not the only important factor. Institutional differences—such as the currency in which a country borrows and whether it has control over its own central bank—also matter.

Recently, however, I watched a video of French high school students protesting the appalling conditions at their school. It made me think about a country’s fiscal crisis in a different way.

The school’s toilets were broken and unusable.

Worse still, they had been left unrepaired, forcing students to go all the way home during breaks just to use the bathroom.

This was happening in France, an advanced economy.

Schools Break Down Before Countries Default

In addition to the toilets, the video covered aging school facilities, delayed repairs, education funding, and teacher staffing problems.

It is easy to understand why the students were protesting.

Schools are among the most basic public services a country provides. If a country cannot even keep the toilets working, that is a rather sorry state of affairs.

France has enormous government debt and a fiscal deficit, and it is under pressure to repair its public finances. As a member of the eurozone, it also cannot conduct an independent monetary policy in the way Japan can.

That said, France has not formally defaulted on its debt, and the problems with school facilities cannot all be explained by the fiscal deficit alone.

Even so, there is an important issue here.

A country can decline through the deterioration of its public services without ever declaring bankruptcy.

The government does not suddenly announce one morning, “As of today, the country is bankrupt.”

School repairs are postponed. Public facilities grow old. Necessary staff can no longer be secured.

These small failures accumulate until, before people realize it, their living conditions have deteriorated.

Government bond interest payments may continue, but the school toilets do not flush.

This is a side of a country that fiscal statistics alone cannot reveal.

France Is Not Greece, but the Problem Is Not Small

When we think of a fiscal crisis in the eurozone, the former crisis in Greece comes to mind.

Greece fell into a severe debt crisis and implemented harsh austerity measures in exchange for international financial assistance.

France differs from Greece in both the size of its economy and the structure of its government bond market. At present, it is not in the same state of collapse.

But if an economy as large as France were to fall into a serious fiscal crisis, the effects would not remain within its borders.

Moreover, any attempt to restore the country’s finances by cutting spending would naturally provoke resistance from the public.

People do not want tax increases. They do not want pension cuts. They do not want reductions in public services.

Yet there is also a limit to how long debt can continue growing.

For politicians, none of the available choices is welcome.

As a result, work that can be postponed without immediately bringing down the government—such as repairing broken facilities—keeps being pushed back.

Yet the Olympics Still Go Ahead

There is one thing I cannot help wondering about.

France hosted the Paris Olympics in 2024.

It welcomed athletes and tourists from around the world, presented a spectacular opening ceremony, and sought to make a major national event succeed with the country’s prestige at stake.

At the same time, school toilets remained unrepaired and students were protesting.

How do we explain that contrast?

The Olympic budget could not simply have been transferred in its entirety to education, and not all the cost of hosting the Games came from taxes.

As a symbol of political priorities, however, the contrast is striking.

Repairing a school toilet will not be shown on television around the world.

Adding one more teacher will not make international news.

Hosting the Olympics, on the other hand, allows a country to display its prestige to the world. Politicians also get to stand in the spotlight.

Maintaining unglamorous public services or staging a spectacular national event.

It is not difficult to imagine which one politicians find more attractive.

Japan Is in No Position to Laugh

Then again, the moment I felt tempted to laugh at France, I remembered Japan.

Japan also carries enormous government debt, has a declining and aging population, and struggles to maintain aging infrastructure.

Even so, it hosted the Tokyo Olympics.

We have been told for decades that the country’s finances are tight. Yet when a massive event appears, another wallet somehow materializes.

When it comes to improving everyday public services, we are told there is no money, there are not enough workers, and we cannot leave the burden to future generations.

But when an event involving national prestige is at stake, the conversation suddenly changes.

Perhaps France and Japan are not so different when it comes to politicians preferring glamorous achievements.

National decline does not necessarily mean a dramatic declaration of bankruptcy.

A country may retain the ability to host an international event while losing the ability to maintain the facilities its citizens use every day.

A country can gradually break down in that form as well.

There is money to launch fireworks for the world, but no money to repair a school toilet.

Apparently, national prestige occupies a much higher place than a flush toilet.