France’s finances and politics are in turmoil. President Emmanuel Macron has just appointed his fourth prime minister in 12 months, the deficit is out of control, borrowing costs are rising and parliament can’t muster a majority to tackle spending.

It’s a serious comedown for a major industrial power that has the second-largest economy in Europe.

Here’s how France found itself in this state of affairs:

First the pandemic, then an energy crisis

France last balanced its budget in 1973, and maintained a generous welfare state with strong worker protections. That worked for years so long as solid economic growth swept tax revenue into government coffers and kept deficits from getting out of hand. First as economy minister and then from 2017 as president, Macron took steps to improve growth and state finances, cutting taxes and spending and raising the retirement age from 62 to 64.

Accumulated debt was high — over 90% of annual gross domestic product from 2008 on — but manageable due to steady growth, near-zero interest rates for much of the past decade, and France’s solid credit rating that let it borrow on favorable terms.

Then came the pandemic, followed by an energy crisis after Russia cut off most natural gas supplies over its 2022 invasion of Ukraine. The government spent heavily on subsidies to keep businesses afloat and shield consumers from higher gas and electric bills. At the same time, a global shift occurred in interest rates, sending them suddenly higher.

Almost overnight, the pile of accumulated debt jumped: from 98% of GDP in pre-pandemic year 2019 to 114% in 2020, where it has stayed. The annual deficit last year ballooned beyond forecasts to 5.8%, well above the 3% limit under European Union rules.

France is hardly alone in loading up on debt in recent years. Its debt pile is smaller than Greece’s, which is 152% of GDP, and Italy’s, which is 138%. It’s also lower than the U.S.’s 119%. France, however, lacks the U.S. advantage of having the world’s dominant reserve currency which supports Washington’s ability to borrow, while Greece has been running budget surpluses after being bailed out and Italy reduced its deficit last year. Greek 10-year bonds now yield 3.3%, indicating the market views them as less risky than France’s.

Macron’s election call was a self-inflicted wound

Macron called new elections last year after his pro-European party took a beating in elections for the European parliament from Marine Le Pen’s anti-immigration, nationalist party. The new French parliament wound up sharply divided, with a leftist coalition facing off against Le Pen’s party and with centrists in between. There’s been no functioning majority — except to say “no” to austerity and topple Prime Ministers Gabriel Attal, Michel Barnier and Francois Bayrou in quick succession.