business

France's borrowing rate at more than 5%: the remoteness of a compromise on the budget worries investors

France's 10-year borrowing rate briefly crossed the 5% mark on Wednesday October 21.

france, taux, etat, economie roland lescure, emprunt, investisseurs, budget, compromis

Key facts

  • France's 10-year borrowing rate briefly crossed the 5% mark on Wednesday October 21.
  • The markets indeed see the current situation as a sign of an impossible political compromise on the budget, while it is the subject of full…
  • Further proof of this distrust on the markets can be seen in the gap which continues to widen between the French and German borrowing rates, the…

France's 10-year borrowing rate briefly crossed the 5% mark on Wednesday October 21.

The markets indeed see the current situation as a sign of an impossible political compromise on the budget, while it is the subject of full negotiations on the choices to be made to clean up the French debt.

Further proof of this distrust on the markets can be seen in the gap which continues to widen between the French and German borrowing rates, the latter being considered the best performer in the euro zone.

The images of demonstrations, clashes with the police and damaged or looted businesses do not reassure investors, who continue to increase their borrowing rates.

This increase in French rates has very concrete consequences since the money borrowed by the State to repay the debt costs more.

This situation is mainly explained by investors' fear about the ability of the French State to repay its debt.

These images of the protest, which are circulating around the world, do not give the impression of an imminent calm.

The French state will have to pay out more than 90 billion euros in 2027, and this situation will eventually be reflected in the rates of real estate loans, consumer loans and business loans.

It will have to pay out more than 90 billion euros in 2027, and this will ultimately be reflected in the rates of real estate loans, consumer loans and business loans.

The images of the protest circulating throughout the country do not give the impression of an imminent calm, while the budget is in full negotiations on the choices to be made to clean up the French debt.

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