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http://www.businessinsider.com/french-borrowing-costs-2012-7
A few days ago, France was paying close to 0.6% to borrow money for 2 years.
Today: 0.17%.
As borrowing costs have re-surged in Spain and Italy, France is seeing major safe-haven flows, the likes of which you normally associate with Germany.
German 2-year yields are already slightly negative, and at this rate, French borrowing costs will be negative soon.
On the surface, this is a bit of a head-scratcher, given the widespread view that new President Francois Hollande is a spend-happy socialist who is doubling down on bad historical fiscal practices.
But the reality is, when it comes to these countries, is that fiscal soundness is much more about perception than reality. After all, Spain has put forth a decent effort on reforms so far. And Italy's deficit isn't that huge (though it's debt is). Nothing that either country is doing is saving them from the sovereign debt collapse vortex.
Read more: http://www.businessinsider.com/french-borrowing-costs-2012-7#ixzz207vEI119
A few days ago, France was paying close to 0.6% to borrow money for 2 years.
Today: 0.17%.
As borrowing costs have re-surged in Spain and Italy, France is seeing major safe-haven flows, the likes of which you normally associate with Germany.
German 2-year yields are already slightly negative, and at this rate, French borrowing costs will be negative soon.
On the surface, this is a bit of a head-scratcher, given the widespread view that new President Francois Hollande is a spend-happy socialist who is doubling down on bad historical fiscal practices.
But the reality is, when it comes to these countries, is that fiscal soundness is much more about perception than reality. After all, Spain has put forth a decent effort on reforms so far. And Italy's deficit isn't that huge (though it's debt is). Nothing that either country is doing is saving them from the sovereign debt collapse vortex.
Read more: http://www.businessinsider.com/french-borrowing-costs-2012-7#ixzz207vEI119
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