FOCUS – This is a first for ten years. The event reflects the concern of investors towards the Old Continent in this period of serious energy crisis.
Quite a symbol. For a few minutes, this early Thursday afternoon, French sovereign bonds with a 10-year maturity traded above 3% on the financial markets, before falling to 2.88% at the end of the day. The day before, this ceiling had already been crossed very briefly. A first for ten years, which reflects the concern of investors towards the Old Continent in this period of serious energy crisis, but also the expectations of the markets of future movements of the European Central Bank (ECB). The entire euro zone is indeed on board in this movement: German rates thus also rose yesterday to end the day at 2.3%.
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This spectacular surge – French interest rates were still moving into negative territory at the end of last year – appears to bode very badly for public finances. In its finance bill, under consideration in the Assembly, Bercy bet on a stabilization of rates at 2.6% at the end of 2023, before a slow rise to 3% by 2027. If this 3% cap has already been crossed this year, the debt burden will soar and strain the French budget a little more. The rate increases are in fact gradually transmitted to the debt issued or re-issued by the country, at the rate of approximately 15% per year. A reasonable fraction which is explained by the high maturity of the French debt.
Despite this delay effect, Bercy calculated that, if the rate increases exceeded the budget forecasts by 1 point, the bill for public finances would increase by 47 billion for the period from 2023 to 2027, i.e. an envelope higher than the budget. of the defense. The evolution of interest rates represents an even more crucial issue for France since, in 2023, the Agence France Trésor, the Bercy department responsible for managing the public debt, will be preparing to raise 270 billion euros on the markets. euros in the medium and long term, an absolute record.
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