Rich world puts on show its financial quagmire – News Air Insight

Advanced economies from the US to France may unleash more political theater on financial markets in the coming week, with no sign of resolution in sight over their swelling debts. In a light period for major central bank decisions and economic data, fiscal and governmental dysfunction across much of the Group of Seven and beyond is likely to draw the spotlight instead.

Alongside any twists in the shutdown stalemate in Washington or talks to resolve a fiscal crisis in Paris, Japan is getting new leadership to oversee the world’s biggest debt burden, and Britain’s slow-burn ordeal over its own upcoming budget will grind on. Meanwhile, the agenda for a meeting of European Union finance ministers from Thursday includes funding for the bloc’s own multi-year financing plan, in what may be a set piece for disagreement.

The overall impression may underscore how political discord is straining major economies, further tested by the choices forced on governments from bloated piles of borrowing. Public debt in the world has now reached $99 trillion, the International Monetary Fund said last month.

The Congressional showdown in US may draw the most attention, with escalation possible if President Donald Trump follows through on his threat to fire – rather than furlough – federal workers.

Meanwhile, France faces imminent deadlines to file a budget. President Emmanuel Macron and his latest prime minister, Sebastien Lecornu, appointing Roland Lescure as new finance minister on Sunday night. The new cabinet faces a daunting task of getting the 2026 fiscal plan through parliament without a majority in the National Assembly.

In Japan, Sanae Takaichi, winner of the Liberal Democratic Party leadership contest on Saturday, will move toward taking office as prime minister to steer Japan through a fraught budget process. In August, the Ministry of Finance made an initial request of ¥32.4 trillion ($219 billion) for next fiscal year’s debt financing needs, which would be the highest-ever amount budgeted for servicing costs.

Meanwhile, the UK’s debate over how to tax and spend while placating investors worried about its public finances is likely to persist as Chancellor Rachel Reeves intensifies work on her budget, due in November. The country may face an updated assessment on Friday from S&P Global Ratings.

Also on that company’s schedule is Italy, which has become a rare fiscal bright spot in the G-7. Italy’s now on track to exit the EU’s list of countries with excessive deficits, and recently won its first upgrade from Fitch Ratings since 2021.