Some readers may not be familiar with French tycoon Patrick Drahi, save when a few years ago he briefly took a 24.5 per cent stake in BT Group via his international holding company Altice (he still owns Sotheby’s). His telecoms corporate empire is built on private commercial and leveraged debt to the tune of some $60 billion. It survives through aggressive financial engineering, loose loan covenants, transferring subsidiaries out of creditors’ reach and bellicose bondholder restructurings. In recent days stressed creditors have taken to the courts to seek safeguards for the collateral on their loans. As interest rates have risen, Drahi, crushed by his debt mountain, is forced into greater confrontation with bondholders. There are striking similarities between Drahi’s perilous debt-fuelled business model and that of the French state, underlined by France’s official statistics office reporting that the economy shrank in the last quarter by 0.1 per cent, following stagnation in the second and a 0.2 per cent decline in the first.
The Governor of the Bank of France recently warned that the country risks being ‘strangled by rising interest rates’
Of course, France manages her sovereign public debt against a solid national tax base and hitherto unrestricted access to international bond markets. But France’s tax base is groaning at 45 per cent tax to GDP – the second-highest in the OECD – just as national public debt soars (to 119 per cent of GDP). As yields on her ten-year treasury notes top 5 per cent so she prepares to tap the bond markets in 2027 for the eye-watering sum of 340 billion euros. Fundamental systemic differences notwithstanding, both Drahi and France share similar strategies, attitudes and market pressures.
First, both have long sought to refinance old debt with massive new debt by a roll-over strategy. Drahi’s financial model relies heavily on such procrastination. For years, Altice paid off maturing corporate bonds not with actual revenue, but by issuing new, larger debt packets – taking full advantage of low-interest-rate environments to fund expansion.
The French state refuses to rein in national expenditure. Instead, it relies on massive sovereign debt roll-overs – 312 billion Euros in 2026. Thus it refinances maturing old debt and covers its 5.4 per cent budget deficit. France last balanced its books in 1974. Neither Drahi nor France has historically prioritised actually paying down principal; both have preferred to use financial markets to delay the day of reckoning.
Second, the international credit squeeze is hastening judgement day. The era of ‘easy money’ and zero-per cent interest rates allowed Drahi to safely hold billions in leveraged debt. When central banks raised interest rates, the floating-rate and maturing debt suddenly became unsustainably expensive to service, sparking Altice’s restructuring crises.
France is undergoing a mirrored macroeconomic shock. Years of heavy spending under President Macron were manageable when bond yields were near zero. However, as borrowing costs rise, France’s annual interest payments are projected to hit €90 billion, surpassing state expenditure on defence and education. The Governor of the Bank of France recently warned that the country risks being ‘strangled by rising interest rates’.
Third, both Drahi and the French government constantly seek to buy time. Drahi handles creditors by giving up minor concessions – like agreeing to a structured debt-for-equity swap in Altice France that wiped out billions in debt while contentiously shifting other assets out of reach – solely to buy time and retain majority control over his empire.
The French government has faced deep political gridlock in the National Assembly since 2024, and again struggles today to pass the most insipid of budgets. Rating agencies and the EU demand austerity to slash the state’s national debt, but the ruling minority government balances these demands against public anger, student protests, and political survival. Like Drahi, the French state hides behind highly complex accounting promises (such as implausibly pledging to the EU a deficit reduction to 3 per cent by 2029) to buy time from international bond markets.
But keeping all these plates spinning as credit tightens opens the door to insolvency and default. Altice entities face actual private-law bankruptcy. Sovereign France cannot ‘go bankrupt’ in the corporate sense. But it faces severe political and economic pressure from the European Commission (which has placed France in ‘special measures’) and now bond markets. But both Drahi and France play on the threat of insolvency and default to keep creditors at bay.
Once seen as a wizard of corporate engineering, Drahi’s belligerent tactics turned creditors hostile, sparking multiple lawsuits and market downgrades. France has traditionally been viewed as one of Europe’s safest economic bedrocks. But international investors are now selling off French sovereign bonds faster than those of neighbouring countries, driving the risk premium (spread) between French and German borrowing costs to historic highs.
In short, while Drahi is a corporate raider answering to banks and France is a welfare state answering to voters, both share a deeply embedded cultural reliance on the ‘magic money’ of perpetual borrowing. They are now getting their comeuppance.
