The countries of the world have a debt of more than 34,675 lakh crore rupees and the burden of paying interest on it is constantly increasing. Protests are taking place in Europe over governments’ economic policies, cuts in government spending and increasing pressure on ordinary people. Borrowing has also become expensive in France amid rising government debt and budget deficits. In October 2026, the yield on France’s 10-year government bond reached around 5%, while in Germany it was 3.41%. This means that France has to pay more interest than Germany to borrow.

According to Al Jazeera’s report, the world’s total debt includes the debt of governments as well as companies and households. The US has a government debt of around Rs 3,933 lakh crore and Japan has a government debt of Rs 826.5 lakh crore. The annual government bond interest bill of developed countries is over Rs 313.5 lakh crore. With more money spent on interest payments, the government may have less money left over for health, education, pensions and other welfare schemes.

How does the government take loans?

In addition to their earnings i.e. money received from taxes and other sources, governments also borrow by issuing government bonds. When the government needs money to spend on roads, railways, hospitals, defense and other schemes, it raises money from banks, insurance companies, mutual funds and other investors through bonds. For example, if the government issues a 10-year bond and an investor buys it for Rs 100, that means he has lent Rs 100 to the government. In return, the government promises to pay interest as per the stipulated terms and return the principal amount on completion of the tenure.

Suppose the government has issued a bond of Rs 100 at an interest rate of 2.5% per annum. In such a situation, the government will give an interest of Rs 2.50 per year to the investor. In 10 years a total of Rs. After paying an interest of 25, the term Rs. 100 will also be refunded on completion of the period. However, government debt is not always spent on new schemes, instead new loans may have to be taken to pay off old loans. How much interest the government has to pay on the loan depends on market interest rates, inflation, investor demand and bond terms.

What happens when borrowing becomes expensive?

When bond prices fall, their yield, i.e. the return on investment, rises. This makes borrowing expensive for governments. In such a situation, the government has to spend more money to pay interest, leaving less money to spend on essential services like schools, hospitals and roads. This is such that when the interest rate on the home loan increases, the EMI burden of the family increases.

Interest rates on 10-year government bonds in Europe’s major economies have not reached 5% since the early 2000s. During the Eurozone debt crisis of 2010 to 2012, countries facing economic crisis such as Greece, Italy and Spain had to borrow at the same or higher rates. In Ireland and Portugal, they had to take bailout packages after bond yields rose above 7%. France now has to pay about 5% interest on borrowing for 10 years, while Germany’s rate is 3.41%. Rising interest rates in France indicate that investors are demanding higher returns in exchange for lending to them. Now France’s bond yields are higher than those of Italy and Greece. The rate in Britain is higher than in France.

How much debt does a country owe?

America has the highest government debt in the world, which is around Rs. 3,933 lakh crores. After this, China has a debt of Rs 2,137.5 lakh crore and Japan has a debt of Rs 826.5 lakh crore. Britain has a government debt of around Rs 418 lakh crore, France Rs 399 lakh crore and Italy Rs 351.5 lakh crore. At the same time, Germany owes Rs 332.5 lakh crore, India Rs 323 lakh crore, Canada Rs 275.5 lakh crore and Brazil Rs 247 lakh crore.

India’s debt is significant even relative to the size of its economy. According to the IMF’s 2026 estimates, the total debt of central and state governments is 83.4% of GDP. However, high debt does not automatically mean a financial crisis. For example, Japan’s debt is about 199% of its GDP, while the figure for India is 83.4%. At the same time, America’s debt is 127% of GDP and France’s debt is 118%. A country’s financial position is assessed not only by total debt, but also by interest-paying capacity, government earnings, economic growth and cost of debt.