What if France defaulted on its debt in 1780's?

France's debt was a contributing factor to the French revolution. But, after the American Revolutionary War, France's tax revenues and debt load were similar to Great Britain's.

Yet Great Britain slowly but surely got out from under this burden.

The key was that France paid twice the interest rate than GB due to a worse credit rating (Imagine the US or the Europeans paying 15% interest in their debt, this gives you an idea what France was facing).

Defaulting on your debt is never good but it might have been the better option.

What would have happened if they'd refused to pay the interest for a few years?

Could this have forestalled the French Revolution?

Any ideas on this admittedly esoteric question?

Thanks.
 
Well this situation certainly postpones the calling of the Estates General. However France faced a considerable amount of unrest in the 1780s due to crop failures. Add a default on the debt, and you still have a possibly explosive situation. Furthermore, it leaves the main French taxation problem unsolved.
 
Well this situation certainly postpones the calling of the Estates General. However France faced a considerable amount of unrest in the 1780s due to crop failures. Add a default on the debt, and you still have a possibly explosive situation. Furthermore, it leaves the main French taxation problem unsolved.

Agreed.

Some Key points in the French Rev. are:
Crop Failures (mini ice age)
Queen Marie Antoinettes spending.
Louis XVI backing down his grandfather's success in forcing the gentry to pay taxes.
 
If you consider France's income in 1789, if I remember well, it had like 600M Livres income, and 690M Livres spending in which 360M were due to debt. In comparison only a 10M were spent by the Court - which include Royal Family expenses.
 
If you consider France's income in 1789, if I remember well, it had like 600M Livres income, and 690M Livres spending in which 360M were due to debt. In comparison only a 10M were spent by the Court - which include Royal Family expenses.

Thanks, DracoLazarus. Where do you get your data?
 
I think that defaulting, while dangerous, would give France some breathing room. It would be a scandal and damage France's credit for sure, but without a massive debt hanging over the country France could potentially recover. Of course, the main problem is taxing the nobility and Church. Louis XVI HAS to grow a pair and challenge the tax exempt status of the First and Second estates. Getting rid of/reforming the Parlements would be a huge help. However, ultimately it depends on the ability of the French government to do away with the vestiges of Feudalism in taxation.

Personally I think the crop failures would be a minor issue. Yes its back for the commoners and could easily cause riots, but on their own the commoners could be dealt with. Really the French revolution was a perfect storm, one that a stronger monarch and government could have dealt with (imagine Louis XIV being forced to return to Paris, for example).
 
When I read that, my first question was "who is the debt owed to?"

If it's French Big Money, that's fuel for insurgency.
If it's French small investors, that's fuel for revolt.
If it's Foreign powers, that's fuel for war.

Not looking good either way. You could get a deal like the Ottomans had later (and Tunisia) with a tutelage of French debt under foreign actors, with the huge loss of sovereignty. Of course, if it's not a full default but a spreading of the debt or renegotiation of interest rate, it would indeed give them breathing room.

That would help counter-act the bad harvests with massive buys of food from the crown from foreign investors. Of course, they'd probably need to pay cash as foreign powers might not agree to further credit sales of wheat.

Quote:
Originally Posted by DracoLazarus
If you consider France's income in 1789, if I remember well, it had like 600M Livres income, and 690M Livres spending in which 360M were due to debt. In comparison only a 10M were spent by the Court - which include Royal Family expenses.


Even if only 10M were spent by the court, it's still a lot for the small peasant. The nobles didn't have a role anymore, local administration controlled by the King was collecting the taxes and having judicial authority. Nobles were just collecting rent for nothing, which created a lot of resentment as well.
To be clear, you will most probably get some sort of change in power but perhaps nothing on the scale of the actual Revolution
 
For the data, it's just figures I remembered from my hsotry textbook.
Actually, there was a few millions' income coming from the Royal Lottery. I'm not sure if it was only in Versailles, but if it was, then i meant the Court mostly paid for its own expenses.
 
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