France: a crisis in slow motion?

The recent repricing of global yields has also eased the pressure on French sovereign spreads somewhat, but this retracement does not solve France’s structural debt sustainability issues. The election cycle complicates budget negotiations, so we find it hard to see a near-term catalyst that can durably arrest the rise in French spreads. However, the country does not face an immediate debt crisis, and European institutions will ensure that this remains a French story