천하天下

In the autumn of 2026, protests shouting 'Block Everything' revived in the streets of Paris, Lyon, and Marseille, and the cabinet repeatedly collapsed over the budget. Growth remained at 0%, virtually stagnant, and public debt exceeded 117-118% of GDP, surpassing 3.5 trillion euros. Ahead of the 2027 presidential election, public opinion is divided between the far-right National Rally (RN) and the far-left La France Insoumise (LFI). A country once the capital of the 'European way of life' has now become a laboratory for the structural crises facing the continent.

The End of Free Peace, and the War of Finance

The peace dividend Europe enjoyed after the Cold War was a hidden resource that allowed defense spending to be diverted to welfare and education. After the war in Ukraine, that premise disappeared. NATO member states have already exceeded the 2% target, and at the 2025 summit, they even set a goal of spending 5% of GDP on defense by 2035. Germany sharply increased its defense spending to 2.6-2.7% of GDP by NATO standards, and the defense spending of European NATO members has almost doubled in nominal terms in just a few years.

The question is where the money comes from. France's defense spending is around 2.1-2.2% of GDP, slower than Germany and much lower than the frontline countries in Eastern Europe. For a country with nuclear deterrence and overseas projection capabilities, this might seem passive. However, France already has a budget deficit exceeding 5% of GDP, and interest payments alone exceed 60 billion euros annually. If defense spending is further increased, something among pensions, healthcare, or local grants must be cut. The pension reform (raising the retirement age) that the Macron government pushed through in 2023 was frozen until January 2028 amid street protests and parliamentary deadlock. Instead of the fiscal effects of the reform being delayed, only political costs remained.

Security is no longer 'free.' However, France has failed to build the political consensus to reduce welfare in exchange for security. Filling that void is the veto power of the streets. The protest culture, where unions, youth, and retiree groups intersect, is not just a simple social conflict but an actual veto mechanism that prevents the state from shifting future costs to the current generation. As a result, the government attempts austerity, collapses, and then increases the deficit again.

The dual collapse of cheap energy and the Chinese market

The German model operated by relying on Russian gas and the Chinese market. That model has already broken. European industrial electricity prices are roughly twice as high as in the US and about 50% higher than in China. Production bases for chemicals, steel, and automobiles are moving to the US and Asia, and finished vehicle manufacturers, including Volkswagen, have announced large-scale layoffs. China is no longer Europe's end market but a competitor pushing Europe out of electric vehicles, machinery, and capital goods. Germany's share of exports to China has plummeted, and some analyses attribute a significant portion of Germany's GDP stagnation to 'China Shock 2.0' and energy costs.

France differs from Germany in this regard. With a high proportion of nuclear power, electricity prices are lower than in Germany. The manufacturing sector's share is also half that of Germany, so the direct impact of industrial shocks from China is relatively smaller. Aerospace, luxury goods, agri-food, and nuclear technology still maintain competitiveness. However, this 'relative buffer' has created an illusion. A less hollowed-out industry does not mean there is a growth engine. France's growth rate is projected to be around 0.6% in 2026, and after negative growth in the first quarter and zero growth in the second quarter, it is on the verge of a technical recession. The unemployment rate has risen again to 8.1-8.3%, and youth unemployment exceeds 21%. Along with Spain's youth unemployment at 23.4% and Italy's at 18.4%, the Southern European/French-style 'country without a country for the young' is becoming entrenched.

The deeper problem is technological sovereignty. There are no European big tech companies among the top global market capitalization. The regulatory environment, exemplified by GDPR, and risk-averse capital markets have prevented startups from growing to US scale. Data, cloud, and AI infrastructure rely on US platforms, and the real benefits of solar and battery supply chains have gone to China. France proclaimed itself a 'startup nation,' but that slogan has faded in the face of budget deficits and political uncertainty. Companies are taking a wait-and-see approach until the 2027 presidential election. If investment stops, productivity also stops.

Population: Even France crosses the threshold of natural decrease

The total fertility rate in the European Union has fallen to the low 1.3s. Italy's 1.18 and Spain's 1.10 are already close to 'reproductive incapacity.' France was long an exception in Europe. Family allowances, childcare, and a relatively high female labor force participation rate sustained a rate in the 1.8s. That exception has broken. In 2025, the total fertility rate fell to 1.56, the lowest since World War I, and with 645,000 births versus 651,000 deaths, natural increase turned negative for the first time since World War II. The slight population increase was due to net immigration (estimated +176,000). Those aged 65 and over now account for 22% of the total, almost equal to those under 20.

Macron's talk of 'demographic rearmament' is less rhetoric and more akin to fear. Pensions and healthcare costs are already central to the budget, and as the baby boomer generation enters their 80s, the expenditure curve will steepen further. Filling labor shortages through immigration has worked, but the political cost of integration failures has accumulated. The segregation of the banlieues, recurring riots, and debates over security and identity are the strongest fuel for the far-right. The National Rally promises both immigration restrictions and a return to a retirement age of 62 (some 60). Economically, this is contradictory. It means reducing the workforce while increasing pension recipients. Politically, however, it is consistent. This is because it follows the emotional logic of 'our money for our elderly.'

The flaw that brought it down: one currency, twenty-seven budgets, and a street veto.

The euro was a devalued export engine for Germany and a shackle for Southern Europe, depriving it of exchange rate adjustment tools. That structure remains. When a crisis hits, Northern Europe demands discipline, while Southern Europe and France demand solidarity. France is not as much of an export machine as Germany, yet it is large enough not to be exposed to the market as much as Italy. Thus, reforms are always 'just a little, later.' In a country where fiscal austerity and protest politics operate simultaneously, investment in infrastructure and future technologies is chronically delayed.

After 2024, French politics pushed this flaw to the extreme. The general election led to a divided parliament, and prime ministers were successively replaced over budget disputes. In the summer of 2026, the bond market widened the France-Germany sovereign bond spread again, and credit rating agencies revised their deficit projections upwards. Among the likely scenarios for the 2027 presidential election is a runoff between Le Pen (or Bardella) and Mélenchon. One side advocates immigration control and welfare defense, while the other proposes partial debt write-offs and increased fiscal spending. What the market fears is not the ideology itself, but that both are difficult to reconcile with current fiscal constraints.

Europe's technological failure meets political failure here. While high walls were built with regulations, innovation escaped from within. The renewable energy transition advanced morally, but the supply chain was ceded to China. In the digital realm, it became a colony of American platforms, and in security, it relies on American intelligence, missile defense, and strategic assets. The portrait of Europe in the 2020s is one where, while speaking of strategic autonomy, it failed to create the finances to realize that autonomy.

The future depicted by decline, and its relationship with the world

Europe's decline is more than just the 'fall of a continent'; it signifies the collapse of one pillar of the post-war liberal order. Post-war Europe operated with a triangle of American security, a globalized market, and an internal welfare state. That triangle is now simultaneously shaking.

First, in terms of security, Europe is transitioning from a 'normative power' to 'rebuilding military sovereignty.' However, the pace of this transition varies by country. Poland and the Baltic states spend 4-5% of their GDP on defense, Germany has embarked on rearmament, and France, while trying to maintain its nuclear and diplomatic pride, is constrained by financial limitations. In a world where American security commitments are becoming transactional, Europe has not become a unified strategic actor, with each country rearming at its own pace. Each time the war in Ukraine and the Middle East crisis shake energy, logistics, and inflation again, Europe's internal divisions grow.

Second, economically, the world is shifting from globalization of efficiency to bloc-based security. China's overproduction and the US's industrial policies are squeezing Europe from both sides. Europe has three paths it can take: protectionism to defend existing industries, integration into alliance-based supply chains with the US and Asia, or completing its internal market and creating a 'united Europe' through common fiscal and industrial policies. In reality, these three paths are intertwined and adrift. While joint borrowing and a common defense industry are progressing, France's fiscal crisis, Germany's industrial crisis, and Eastern Europe's security crisis are not keeping pace.

Third, politically, Europe is experiencing the collapse of the center. The far-right is being 'de-demonized,' and in eastern Germany, the possibility of the Alternative for Germany (AfD) taking control of state governments is being discussed for the first time. The French presidential election is the culmination of this trend. A victory for Le Pen or Bardella would shake Brussels' budget, immigration, and common foreign policy, while a victory for Mélenchon would test bond markets and eurozone rules. Either way, France's self-proclaimed role as the 'engine of European construction' since the post-war era would be weakened. The European Union risks being reduced from a community of norms to an alliance for crisis management.

The implications of this transition for the world are clear. The European-born language of free trade, multilateral norms, human rights, and climate still exists, but the prosperity and military leeway that supported it have diminished. In the Middle East, Indo-Pacific, and Africa, Europe's voice is overshadowed by American deals, Chinese capital, and Russian power. The world is choosing self-preservation over cooperation, and Europe is caught in the paradox of being unable to even forge internal consensus in the midst of this self-preservation.

What France shows, what Korea should read

France is a country where Europe's weaknesses converge: high welfare expectations, strong street politics, a divided parliament, an aging population, immigration conflicts, and a national pride that is not yet completely dead. Even with the energy asset of nuclear power, if finances and politics collapse, growth stops. Conversely, technology alone is not enough. If a nation loses the political capacity to allocate future costs to the present, external shocks immediately become systemic crises.

Korea is on a steeper slope than Europe. It imports 95% of its energy, its security is deeply tied to the ROK-US alliance, and its intermediate goods and markets are deeply linked to China. Its total fertility rate of 0.7 is far more serious than France's 1.56. Its strength, unlike Europe, lies in holding future infrastructure such as semiconductors, AI, and data centers. However, even that strength is instantly exposed to external variables if not supported by power grids, water, talent, and geopolitics.

Europe, complacent in 70 years of peace and welfare, did not factor into its blueprint the possibility of its three pillars shaking simultaneously. The result we are witnessing now is not a continental business cycle, but the entrance to a rearrangement of the post-war order. The streets of France are the loudest signpost at that entrance. Citizens trying to protect welfare, voters trying to close the country, the Ministry of Finance trying to balance the books, and presidential candidates calculating votes clash at the same time. The outcome of that clash will define Europe's tomorrow, and that tomorrow will change the climate of the world Korea stands in. Painful change is not a slogan, but rewriting internal distribution rules before external pillars collapse. The present of a country that has postponed that task is clearly visible through France.