Key facts
- France's 10-year borrowing costs have risen to 4.7%, the highest since 2008.
- Bank of France Governor Emmanuel Moulin stated that France must avoid a sovereign debt crisis.
- Moulin said it would be misguided to expect the European Central Bank to intervene.
- He noted that fiscal tools to fix deficits lie with national governments, not the ECB.
- France's minority government will present its 2027 budget bill next Thursday.
- Rising debt-servicing costs risk putting a gradual stranglehold on public finances.
France must take all necessary steps to prevent a sovereign debt crisis, particularly as the country approaches its presidential election next year, according to Bank of France Governor Emmanuel Moulin. He emphasized that relying on the European Central Bank to resolve fiscal issues would be a miscalculation.
French 10-year borrowing costs have surged to 4.7%, marking their highest point since the 2008 global financial crisis, as investors demand a higher premium due to fiscal and political uncertainties in Paris. Moulin, however, noted that the current situation is not comparable to 2008, citing a solid and well-capitalized financial sector.