Ten-year French sovereign bonds have been trading since the start of the year between 2.5% and 3.2%, compared to 0% at the end of 2021. XOSE BOUZAS/Hans Lucas via AFP
DECRYPTION – With 3,000 billion euros in debt, France finances itself at an ever-increasing cost due to the increase in key rates.
Stoics. The financial markets showed no sign of nervousness towards Paris on Tuesday, following the presidential promise of a tax cut of 2 billion euros. Compared to the country’s debt, very close to the threshold of 3000 billion euros, the amount is not really intimidating. Investors, who are for the moment riveted to the debates between Republicans and Democrats in Washington, are not moved either by the fact that the trajectory of the savings which would make it possible to finance this reduction must still be specified. But France remains on the razor’s edge.
Last fall, the British government’s announcement of a tax packageadmittedly on a much larger scale, with 45 billion pounds of untargeted tax cuts, had suddenly panicked the markets, causing the resignation of Prime Minister Liz Truss and reminded all the leaders of the Western world that the public debt had once again become a highly sensitive subject.
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