While they will have a cost for our public finances, tensions on the bond markets worry little in France.
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Is this the effect of the electoral campaign? Or the heat wave, which plays a role of anesthetic? The wave of panic that has seized the bond markets for a few days, justifying an emergency meeting of the European Central Bank, Wednesday, June 15, seems to leave France in a curious state of indifference.
The issue for public finances, and more broadly for the quinquennium which opens, is however far from neutral. The rate at which France is financed on the markets, which has increased continuously since the beginning of 2022, has brutally climbed, in recent weeks, in the wake of fears around Italy. At 2.24 % Wednesday, June 15, it was three times higher than Bercy’s projections for the year. An increase of 1 point on the rates weighs down the interest load from 2 billion to 3 billion euros the first year, and more then with,” eventually, An additional annual cost of almost 40 billion euros, almost the current defense budget “, a recalled the governor of the Banque de France, François Villeroy de Galhau, Tuesday May 10.
“We are in the electoral period, so no one wants to speak of austerity, notes Ludovic Subran, chief economist at Allianz. France also benefits from the fact that Italy is in a more worrying situation. But but The fundamental problem remains: rates go up everywhere in the euro zone and, for a country which is not a model of budgetary orthodoxy, this will weigh on the debt service. “
” No panic wind “
Dispatched on France Inter on Wednesday, June 15, the Minister of the Economy, Bruno Le Maire, assured that there was “no panic wind” from the monetary authorities, seizing on the contrary the ‘Opportunity to recall the need to give a majority to the government in the second round of the legislative elections, Sunday, June 19, only capable, in his eyes, to fight against the fragmentation of the euro zone in the face of a left alliance presented as anti-European . “Faced with this rise in rates, do you really think it’s the time that France goes aside, explains that it will not reimburse its debt and that it puts on its partners Europeans? “He reacted.
The situation of its public finances, however, does not place France in a very comfortable position. At the end of two years of health crisis, the debt approached 113 % of the gross domestic product and the deficit, 6.5 %, at the end of 2021. France is also part of the countries that have spent the most to counter the effects inflation since fall 2021.
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