UBS CEO Urges Hard Measures for France Debt Crisis as 10-Year Yield Hits 4.77%
Updated
Updated · CNBC · Oct 6
UBS CEO Urges Hard Measures for France Debt Crisis as 10-Year Yield Hits 4.77%
3 articles · Updated · CNBC · Oct 6
Summary
Sergio Ermotti said France needs “hard measures” to tackle its debt crisis, warning that small, incremental steps will not be enough to shrink the country’s debt pile.
France’s 10-year OAT yield stood at 4.7689% on Tuesday after easing 9 basis points, with borrowing costs now above Greece and Italy as investors fret over debt, deficits, bond supply and election uncertainty.
The UBS chief compared the turmoil to the 2011 eurozone sovereign debt crisis, but said France could prove harder to stabilize because of the size of its economy.
The OAT-Bund spread has widened above 140 basis points as investors shift into German debt, and Federated Hermes said French bonds are increasingly being priced more like Europe’s periphery than its core.
Marine Le Pen pledged deep spending cuts and warned France risks default, while analysts said the ECB is still unlikely to intervene unless spreads widen further.