France’s Appetite for ‘Magic Money’ Has Turned Into a Debt Bomb
WSJ writes that the country is on the precipice of a dangerous financial spiral.
The wild card that could push France to the edge is the upcoming presidential election. Investors fear neither Mélenchon or Le Pen are taking France’s financial problems seriously.
“Everybody is talking about further ways to spend money,” said Koutny of Vanguard. “The fiscal situation in France is already not amazing. If you then incorporate policies these parties are talking about, it looks even worse. “
Investors often describe bond markets as enforcers of financial discipline, citing countries like Greece that transformed their finances after painful debt crises. Charles Rodwell, a centrist lawmaker who sits on the finance committee of the National Assembly, said he hopes market pressure will help focus minds across the political spectrum, adding: “We need shock therapy.”