Bond markets doubt France’s ability to control its rapidly growing debt amid the prospect of a far-right or far-left president. The cost of insurance against a French default is now the highest among major EU countries and the UK. Early Friday, five-year credit default swaps rose to 81 basis points, while 10-year bond yields jumped to 4.989%, the highest since 2002, with a spread of 152 basis points over German Bunds. The budget deficit is estimated at 5.4% of GDP, and the debt-to-GDP ratio is expected to climb to 122% next year from 119% this year, amid anemic economic growth of just 0.5% for 2024.
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