Nationwide protests over the high cost of living swept across France on Saturday, deepening the country's turmoil over public spending and debt just days before a pivotal vote in the National Assembly.

In several cities, the demonstrations descended into rioting. Luxury boutiques and supermarkets were looted, while public buildings were defaced and in some cases set on fire.

The unrest followed mass demonstrations earlier this month, when students complained of run-down classrooms, missing teachers, and school buildings unequipped for temperatures—conditions protesters attributed to years of underinvestment in public education.

France's fiscal position, meanwhile, has pushed bond yields to their highest levels in 24 years, flashing warning signals not seen since the eurozone debt crisis in 2011, when Greece, Ireland, and Portugal required international bailouts.

With far-right and far-left candidates leading the race to become France's next president in the spring, markets are increasingly skeptical that whoever wins will take the painful steps required to rein in the deficit.

Mujtaba Rahman, managing director for Europe at Eurasia Group, argues that France is contending with three overlapping crises: one of liberal democracy, one of fiscal mismanagement, and one of youth disaffection. "But the fiscal crisis is the most dangerous, underlying many of the country's woes and threatening to bring it to ruin," he wrote in a New York Times op-ed on Thursday. "France, truly, is on the brink."

The three emergencies are intertwined. Rahman noted that although France's education spending exceeds the European Union average, more than a quarter of that money goes toward the pensions of retired teachers.

Nobel laureate Paul Krugman drew a similar straight line between France's retirement largesse and the student unrest. Writing in a Substack post last week, he argued that the country's very generous government pension plan has come at the expense of education spending, effectively subsidizing older French residents at the expense of everyone else.

France's public debt now stands at a record $4 trillion, or 119% of GDP—the highest ratio since the immediate aftermath of World War II. The pandemic, along with the wars in Ukraine and Iran, worsened the country's fiscal picture, but President Emmanuel Macron has also pulled back from reforms designed to rein in the debt.

Sébastien Lecornu, the latest occupant in a revolving door of prime ministers, has proposed a 2027 budget that would modestly bring the deficit down to 5% of GDP from 5.4%—still well above the 3% of GDP ceiling that European Union fiscal rules set for member states. He faces a first critical vote in the National Assembly on Tuesday.

"If his government fails to pass the budget, the cost of servicing French debt may explode," Rahman predicted. "France could be forced to seek assistance from the International Monetary Fund and to pray for it from the European Central Bank — a humiliation for the world's seventh-biggest economy."

According to Rahman, the market's distrust of France is more political than economic: investors fear the country has become ungovernable, with the extreme left and right unlikely to make the necessary changes. Far-right leader Marine Le Pen has vowed to roll back the official retirement age to 62 and has previously suggested dropping it to as low as 60. Far-left presidential candidate Jean-Luc Mélenchon, meanwhile, is campaigning on a plan to have the central bank simply cancel its holdings of French debt.

Positions like these, Rahman said, help explain why bond investors have driven France's borrowing costs to sky-high levels. "The country, they fear, is becoming socially volatile and institutionally paralyzed."

He added that May's presidential election may not even prove decisive for financial markets, since a legislative election in June could fail to produce a parliamentary majority for the new president, setting up further political gridlock.

France could still avoid imminent catastrophe in the coming week if Le Pen orders her allies in the Assembly to abstain on the budget, allowing it to pass. "That may avert, for now, the kind of meltdown suffered by Greece after the financial crash," Rahman warned. "But France is no longer in control of its destiny."

An explosion in borrowing costs would signal that France is at the mercy of the bond market, which has begun pricing in growing odds of a debt default—a dynamic similar to the one that has left the United Kingdom effectively in thrall to so-called bond vigilantes, the investors who push a government's borrowing costs higher when they doubt its willingness or ability to pay its debts. Because government bond yields serve as the benchmark for borrowing across an economy, a sustained spike in French yields would matter well beyond the trading floor.

Thierry Wizman, global FX and rates strategist at Macquarie Group, argued in a note on Tuesday that a series of convulsions would have to occur for France to get its act together and appease the bond market. Those could include a no-confidence vote that leaves France with no governance from the Assembly, a Moody's credit downgrade, a widening of street protests and violence, a sharper and contagious spike in France's bond yield spread, and the election of Le Pen as president.

The European Central Bank, he argued, would not come to the rescue quickly for fear of encouraging "moral hazard," and other bailout mechanisms lack the firepower for an economy as large as France's.

"Either way, it would seem that one would have to go through the valley before getting to the other side of the fiscal responsibility gap," Wizman added. "And only after all that transformational pain of the next few months may France find its spine and commit to austerity."

story was originally featured on Fortune.com