Opposite me the sharply dressed woman has washed-out eyes, where the white is bloodshot red. She hasn't been sleeping; exhaustion is etched into her face. 'Now we are checking hourly,' she tells me. 'We have a room dedicated to the crisis, where someone sits checking the figures as they come in. It's awful – terrible, worse than you can imagine.'
Where she works – a Paris-based clearinghouse for bonds and securities across Europe –trades have suddenly doubled in response to the volatility of the market. It's the not-knowing that is the worst, she says. French banks more than any other EU country are heavily exposed to Italian debt (at 416.4 billion euros, according to Reuters) so the mood in Paris is jittery, to say the least.
Moreover, Brussels recently urged the French government to announce further measures to reign in its 'excessive public debt' by 2013 while investors have expressed no-confidence in the state's ability to repay its debt, via the rapid jump in the so-called 'spread' – the difference between the rate paid by the French government as opposed to the German benchmark.
Both Germany and France have high levels of public debt – France at 82 % debt to GDP ratio and Germany, 83 % (compare this to Australia, with its lowest debt ratio in the OECD at 28 % - Government Public Debt, 2010 estimate, CIA World Factbook). For the French budget deficit the target is to fall to 4.5% of GDP next year and 3% in 2013.
To put these figures in context, to join the Euro under the Maastricht Treaty, EU states needed a public debt to GDP ratio of 60 % and a budget deficit of just 3 per cent.
Part of the French economy's vulnerability lies in the market perception that unlike Germany, France does not have the ability – or will – to reverse its public debt that spiked following the 2008 crisis. The extra €7 billionausterity package announced by the French Prime Minister, François Fillon on the 7th November did little to shift this view.
The perceived weakness of the French economy reflects other concerns too. As one French banker told me, it is simple: Germany's trade balance is positive, the French negative, while in France economic growth is weak. French President Nicolas Sarkozy has conceded that GDP growth in 2012 would reach 1%, but the Economist reports thatNatixis, a French investment bank, believes growth will fall to 0.5%. Citigroup puts it at an even lower 0.1%.
One of the more unsettling aspects of living in France, I was told soon after my arrival, was that anyone will leftist politics will soon find themselves sounding like the spawn of Thatcher. Certainly, the strikes and domestic politics of no-change take their toll, but more than this is the difficulty understanding French attitudes to the State, which underpin the battle with debt.
Like many things in France, reasons for the public debt are complex and manifold. Some cite a failure to make necessary economic reforms in the 1980s, others locate the problem with the social security system, in particular the generous reimbursement of consumer spending on health; while still more cite the lumbering apparatus of the state, which is extremely expensive to run.
To understand this situation it is important to acknowledge the contradictory mix of idealism and self-interest that underpins not only social policy – and the economy as an extension of this - but the way in which the public engages with politics in France. Perfection is sought, a sense of order and a utopian vision of not only what society is, but what it should be.
For this reason, the social safety net is considered by many to be at the heart of French identity, the end result of 1789 (one French blogger has said that the three symbols of France are La Marseillaise, the flag and the universal health system). Frequently in conversation people talk about the need for 'solidarity' or describe someone positively as solidaire.
Many French people have a strong emotional attachment to their sécu and its history. First developed by the Conseil national de la Résistance in October, 1945 and referenced in the preamble for the Constitution of the 4th Republic, from the beginning the system was designed to support the most vulnerable – children, mothers and older people – and protect their right to 'health, financial security, rest and leisure'.