France’s Appetite for ‘Magic Money’ Has Turned Into a Debt Bomb
Investors are demanding more compensation as France’s 10-year yield nears 5%, and the spread over German bonds widens to its highest level since 2012.
- On Tuesday, French 10-year bond yields surged to 5.33%, their highest level since 2002, while the spread over German Bunds widened above 140 basis points amid investor panic.
- France's national debt is projected to hit a record 119% of GDP this year, intensifying scrutiny of borrowing sustainability amid planned record bond sales and eurozone inflation at 3.8%.
- Top economist Mohamed El-Erian warned Monday that "contagion risk is back," as Italian and Greek 10-year yields spiked to 4.74% and 4.57% respectively over the week.
- European Central Bank policymaker Joachim Nagel stated Thursday that the bank's debt-buying tools are designed for price stability, not targeting sovereign bond spreads, addressing intervention speculation.
- UBS CEO Sergio Ermotti warned Tuesday that resolving France's debt crisis requires "hard measures," while far-right presidential candidate Marine Le Pen called for sweeping spending cuts.
150 Articles
150 Articles
A Growing Borrowing and an Ageing population... the Debt Is Chasing Europe From the Gates of France.
The writer in Bloomberg Meher Sharma warns that the financial crisis in France threatens to move to other countries in Europe, given the ageing of the population and the inability of politicians to offer solutions.
The wave of student protests that has erupted in France highlights the growing financial pressures facing Europe's second-largest economy as the government struggles to contain a ballooning budget deficit. France's public finances are in a particularly difficult situation, CNN said in a report, noting that the public debt exceeded $4 trillion in June, exceeding the size of the French economy, according to the country's statistics agency. At the…
If France seems too important to go bankrupt, its current budgetary situation is beginning to scare. So much so that it borrows more expensive than Greece or Italy, countries previously considered to be 'peripheral'.
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