{"id":117975,"title":"French borrowing costs surpass Greece’s for the first time","publisher":"Share Talk","author":"sharetalk","published":"2024-11-28T16:33:01+00:00","modified":"2024-11-28T16:33:01+00:00","canonical_url":"https://www.share-talk.com/french-borrowing-costs-surpass-greeces-for-the-first-time/","markdown_url":"https://www.share-talk.com/french-borrowing-costs-surpass-greeces-for-the-first-time.md","json_url":"https://www.share-talk.com/french-borrowing-costs-surpass-greeces-for-the-first-time.json","category":"B2B","categories":["B2B","Blogs","Business & Support Services","Technology","Technology, Media & Telecoms"],"tags":["bond market","European","Fitch and Moody","FRANCE","GDP","government collapse","Greece","Italy","Michel Barnier","Portugal","Spain"],"featured_image":"https://i0.wp.com/www.share-talk.com/wp-content/uploads/2024/11/dreamstime_m_28029291.webp?fit=1200%2C805&quality=80&ssl=1","format":"news","language":"en-GB","content":"French borrowing costs have surpassed those of Greece for the first time, as Michel Barnier’s government faces the threat of collapse.\n\nOpposition parties from both the far-right and far-left are challenging the government over its budget proposal, which includes €60bn (£47bn) in tax hikes and spending cuts. Bond investors fear that a government collapse could derail efforts to reduce borrowing and worsen France’s fiscal position.\n\nThis shift in borrowing costs highlights a significant change in how lenders perceive the creditworthiness of eurozone countries.\n\nMichiel Tukker, senior European rates strategist at ING, warned: “A no-confidence vote could undo the progress made with the current budget and plunge the country into a period of political uncertainty.”\n\nIn 2012, during the eurozone sovereign debt crisis, Greek 10-year bond yields soared to over 37 percentage points above French bonds as Greece teetered on the edge of default. Today, the situation is starkly different. Greek 10-year bonds now yield 2.979%, slightly higher than France’s 2.953%.\n\nFrance’s rising debt levels, now at 112% of GDP, have gradually diminished its status in the bond market, while former crisis-hit countries—Portugal, Italy, Greece, and Spain—have improved their fiscal positions and become more attractive to investors.\n\n“Even with successful consolidation, France would still maintain a relatively high budget deficit,” said Max Kitson, rates strategist at Barclays. “In contrast, Greece’s debt-to-GDP ratio shows a declining trend, while France’s continues to rise.”\n\nAttention will turn to Friday evening when S&P Global Ratings updates its assessment of France. Fitch and Moody’s recently downgraded their outlooks for the country, intensifying pressure on its fiscal credibility."}