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French drama

Sep 27, 2024

Investors remain sceptical about the political landscape in France under the Barnier government, particularly regarding the sustainability of its public finances. Although France’s net debt-to-GDP ratio (110.8%) is indeed lower than Greece’s (159.8%), it faced a far larger public deficit in 2023 (-5.5% compared to Greece’s -1.6%). In a remarkable development, the yield on Greece’s 5-year government bond dropped below that of France’s for the first time in history. This shift suggests that financial markets now view Greece as a more favourable borrower than France.

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