Michael A. Arouet: France is already paying crisis-era...
France is already paying crisis-era rates to borrow, but the French left’s current reaction to the emerging debt crisis makes it even scarier. Their answers make the reasons for those rates more credible. Left presidential candidate Jean-Luc Mélenchon has seriously proposed a sovereign default on the hundreds of billions held by the Banque de France. Relabeling it a freeze or a zero-coupon perpetual does not change the substance, a default on debt the Eurosystem already holds. This would push French yields on new debt from 5% probably well above 10% going forward, and take Italian, Spanish and Belgian sovereign debt yields with them.
The rest of the left is a little less theatrical, but not much more useful. They seriously threaten to bring down a government over €54 billion in savings and plan street blockades while the interest bill rises. This would clearly calm the markets.
The Socialists, as always, talk about higher taxes in a country with one of the highest tax burdens, and most taxes in the world, already throttling growth and investment. Absolutely no one on that side offers a path that stabilizes the debt ratio by addressing the absurd French pension system and grotesque state spending. Refusal is treated as a program.
If it wasn’t so sad to watch, it would be quite funny.
https://x.com/MichaelAArouet/status/2107013144820240743
