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October 1, 2025

Better than the State

Mr. Market has decided that LVMH now pays a lower yield on a 10-year bond than the French government on bonds of the same maturity in 2033. In other words, investors today perceive less credit risk in the world’s leading luxury group than in the French Republic itself.

At first sight, this feels counterintuitive. After all, it is much easier to oblige citizens to pay their taxes than to persuade them to buy a handbag or a bottle of champagne. But this situation highlights two important realities: the extraordinary strength and resilience of global multinationals on one side, and on the other, the erosion of confidence in the ability of French politics to address structural issues and bring public debt under control.

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