France, a bad student in the debt landscape in Europe – 07/17/2025 at 07:35

Borrowing over ten years could soon cost France more than in Italy (AFP / Joel Saget)

Borrowing over ten years could soon cost France more than in Italy. Similarly, After Spain. Meanwhile, Portugal, which already benefit from better rates, hexagon increased in its place as a budgetary student in Europe. However,

At the beginning of July. Nevertheless, the rate of the Italian sovereign debt in the 5 -year expression slipped under the French rate, a first since 2005. However,

The next strong signal could come from the borrowing rate at ten years. For example, the reference for international comparisons, and france, bad student debt landscape therefore to assess the financial reliability of a state in the eyes of the markets. However,

– “Enormes efforts” –

The French rate at ten years, currently at 3.37%, is at the heart of concerns as the gap is reduced with that of Italy, to 3.54%. Meanwhile, The “Spread”. Meanwhile, or the gap between the two, “is reduced to sorrow skin”, underlines Mabrouk Chetouane, manager of the Natixis IM market strategy. Additionally, Meanwhile,

It is now less than 0.2 percentage points, against 1.20 points a year ago. Therefore, The curves could cross. Nevertheless,

This “rapprochement (…) only translates a trend that we see in public finances”, says Philippe Ledent, an economist expert at ING. He believes that it will take “huge efforts” from France to overthrow the steam.

“We are at a critical moment in our history. ” said French france, bad student debt landscape Prime Minister François Bayrou on Tuesday, unveiling his measures to redress the finances of a country subject to the “deadly danger” of “debt”.

He recalled that France’s public deficit reached 5.8% of GDP in 2024. for public debt representing almost 114% of GDP, the third largest in the euro zone behind Greece and Italy.

According to the projections of the European Commission published in May. France should record the worst public deficit in the euro zone in 2025 and 2026.

France finds itself “bogged down in low economic growth, public finances out of control (…) and a rating that tends to deteriorate”, continues Mr. Ledent.

The S&P agency has indeed improved last April the rating of Italy’s public debt to “BBB+”. accompanied by a “stable” perspective, when the note of French debt (AA-) has been matching a negative perspective since February, which france, bad student debt landscape means that it could be demoted.

– “spectacular pragmatism” against political blockage –

Opposite. despite the extent of the Italian debt – close to 3,000 billion euros in 2024, or 135.3% of its GDP – Rome regained the favor of the markets.

The president of the Italian council Giorgia Meloni. her government, under high pressure to reduce this colossal debt, “showed quite spectacular economic pragmatism”, notes Mabrouk Chetouane.

The Italian public deficit was more than expected in 2024, to 3.4% of the gross domestic product (GDP). Better than anticipated tax income even made it possible to return to a surplus of public accounts in the fourth quarter of 2024. which had not happened since 2019.

What “consider that Italy is better able to manage its debt than France”. according to Benjamin Melman, asset allocation manager at Edmond de Rothschild.

france, bad student debt landscape

France is. it, “perceived as a country which cannot make reforms, which has already gone very far with a significant tax rate, and which is today a little blocked”, explains to AFP Aurélien Buffault, bond manager of Delubac AM.

And since the dissolution of the National Assembly in June 2024, investors feared political blockage.

They therefore require a higher yield to have French debt. “a” legitimate “bonus because there is a risk that the country will become ungovernable”, notes Mr. Chetouane.

The announcement by François Bayrou of a draconian budget cure of 43.8 billion euros for 2026 did not move the bond market, which remained of marble. An indifference which should last as long as the measures presented are not materialized.

For Mr. Ledent. “we will have to pass this course, and probably one or the other censorship (of the government) france, bad student debt landscape at the start of the school year”.