Morgan Stanley advises clients to short French and Belgian debt due to rising borrowing costs amid budget pressures and political uncertainty. Investors are urged to consider these risks.
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France's debt problem is becoming a business for Wall Street. Morgan Stanley now recommends investors a bet against French government bonds – while Paris is sinking deeper into debt, growth is almost halting and the interest rate bill is exploding. Thus, the pressure on the eurozone's second largest economy is growing at the point where political promises can hardly be sold: on the capital market.