The Other Side of the Coin
On public debt that belongs to someone, and a story that leaves this out
France’s debts, we are told, will in the end be paid by the Germans. Who receives the money, nobody says.
I. The alarm
The Pioneer, Gabor Steingart’s media house, published a video in October 2026: “Warum Frankreich am Ende ist – und wir dafür zahlen müssen” (Why France is finished – and we will have to pay for it). The message is clear: France has been living beyond its means for decades, the risk premiums on its bonds are rising, and “in the worst case we will have to rescue France with our money”. The expert is Gunther Schnabl, professor in Leipzig and head of the research institute of the asset manager Flossbach von Storch. His conclusion: “German consumers will of course pay their share of the devaluation of French public debt.”
Much of this is true. In absolute terms France has the highest public debt in the EU. Whoever wants to cut spending there loses office: Barnier after three months, Bayrou after nine, and Lecornu survived only because he suspended the pension reform. And whoever knows he will be rescued in an emergency behaves differently. This is called moral hazard, and the term was rightly used.
What is mendacious about this account is not what it says, but what it leaves out.
II. Who owns the debt
Every euro of public debt is a euro of wealth for someone else. France’s debts are claims on the books of insurers, banks, pension funds and asset managers. At the end of 2024 around 55 per cent of France’s tradable government bonds were held by investors abroad, about nine per cent each by French insurers and banks, and another large share by the Banque de France on behalf of the ECB.
In 2025 France paid around 65 billion euros in interest, and the amount rises with every percentage point of risk premium. This interest is paid from taxes, to a large extent from value added tax, which everyone pays who buys anything. It flows to the holders of the bonds. Financial wealth, however, is highly concentrated in every European country; in Germany the richest ten per cent of households own more than half of all wealth. Debt service is therefore not just a burden. It is a current flowing from the many to the few, across national borders.
The same is true of Germany. German taxpayers, too, service federal bonds, and their interest, too, ends up mostly with those who already have wealth.
III. The risk premium without risk
A risk premium is the price an investor demands for a risk. If it rises, the investor earns more. That is fine as long as he also bears the risk.
Schnabl himself describes what happens in an emergency: the ECB intervenes, through its protection instrument or another one, since it has “shown itself to be very creative in the past”. His sentence on this is: “Then France will be rescued.” But it is not the French pensioner who is rescued. It is the investor, who gets his bond back at full value after collecting the premium for years for a risk he does not have to bear in the end. The shakier France looks, the more he earns, and the more certain he can be that he will not lose.
Greece showed what this looks like in practice. In 2016 the European School of Management and Technology in Berlin calculated where the first two rescue programmes went. Of 215.9 billion euros, 9.7 billion reached the Greek state budget, less than five per cent. The rest went into repaying old debts, interest payments and rescuing banks. When a debt write-down finally came in 2012, a large part of the claims was already held by public creditors, that is, by the taxpayers of the eurozone. The private creditors had had time to get out.
The inflation Schnabl fears does not hit everyone equally either. It devalues the savings account and the wage. Whoever owns shares, property and gold gains, because since 2015 the central banks’ cheap money has above all driven up these asset prices.
IV. Who is speaking
There is no need to impute intent to anyone. It is enough to look at where the story stops.
The expert in the video heads the research institute of an asset manager. The broadcaster interviewing him is currently building a “cathedral of capitalism”: the Pioneer Three, a 40-million-euro ship to be moored in front of the Frankfurt banking skyline, with a newsroom and Bloomberg terminals. In July 2026 Gabor Steingart called the programme the “democratisation of capitalism”. Whoever waits for the state pension, he wrote, waits like a donkey; the answer is to send your money to work. In “The Titanisation of the Confetti Cannon” we described what this means: the savings of ordinary people are to move from the pay-as-you-go system into custody accounts on which banks, ETF providers and asset managers earn.
The wasteful state that will ruin the Germans fits into this story. What does not fit is that the same debts are a safe income for the asset managers’ clients, an income that grows with every sign of crisis and is guaranteed by the central bank in an emergency. The video stops exactly where its own business begins.
V. The real dividing line
The video tells of a conflict between countries: thrifty Germany against wasteful France. But the dividing line runs across it, between those who pay interest and those who receive it, in Paris as in Berlin. The French bus driver and the German nurse stand on the same side. So do the pension fund in Paris and the asset manager in Cologne.
It is the same swap of the axis of conflict that we showed in “The Swapped Conflict”, there with old against young. Whoever sets countries against each other, or generations, does not have to talk about wealth.
The diagnosis is nonetheless right: France has a debt problem, and no solution is in sight. But any solution that starts only with spending, with pensions, family benefits and the civil service, leaves untouched the current flowing in the other direction. A budget that cuts spending while paying rising interest to the wealthy is not a consolidation programme. It is a redistribution programme with a savings label.
Further reading: The Titanisation of the Confetti Cannon · The Swapped Conflict · The Structural Redistribution Between Generations · The Medium That Steers Everyone · The Little Apple Tree