France Vows Spending Cuts to Tame Debt as Bond Spreads Stay Elevated
Updated
Updated · Semafor · Oct 7
France Vows Spending Cuts to Tame Debt as Bond Spreads Stay Elevated
2 articles · Updated · Semafor · Oct 7
Summary
French officials said they would do “whatever it takes” to bring debt under control, with the finance minister saying Paris could even bypass parliament to push through spending cuts.
French bond spreads over Germany have narrowed somewhat but remain elevated, showing investors still doubt the government can rein in a mammoth deficit and heavy debt load.
Political polarization is driving that skepticism: previous governments have fallen over budget divisions, and economists at ING questioned whether Marine Le Pen could deliver her even tougher austerity plans.
The standoff leaves France trying to reassure markets that long-standing state spending can be curbed despite a fractured political system.