Despite rising yields and political gridlock, France not facing a debt crisis: analysts

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Analysts say France is not currently facing a debt crisis despite rising borrowing costs and political gridlock. The spread between French and German 10-year bond yields has reached its highest level since the euro-zone crisis, but France’s effective interest rate remains just above 2%, with uncertainties ahead.

Despite the recent surge in French borrowing costs that pushed the country’s 10-year bond yield spread with Germany to a level unseen since the euro zone crisis, analysts are urging calm, saying France is not facing a debt crisis but cautioning that future uncertainties remain. “The short answer is no, this is not a debt crisis,” said Stephane Colliac, senior economist at BNP Paribas. France’s effective interest rate is lower than the rising market yields, at slightly above 2 per cent, around...