Emmanuel Moulin, governor of the Banque de France, warned in an interview with the Financial Times that France could be progressively strangled by interest rates if it fails to restore its public finances. The 10-year borrowing rate approached 5% before falling back to 4.86%, with the spread over German rates briefly exceeding 1.5 percentage points. The government is proposing a 43 billion euro budget effort to bring the deficit down to 5% of GDP from 5.4% expected this year. Debt servicing costs are projected to reach 91 billion euros in 2027, up from just over 79 billion currently, an increase of approximately 12 billion in one year. Public debt would rise from 119.3% to 121.7% of GDP according to the budget draft.
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