SwedenLivingWorld world_2_fill WorldBusiness BusinessSports sports-soccer SportsEntertainmentEntertain

Crisis Level on French Interest Rates Ahead of New Election

There is a crisis atmosphere on the French bond market - where the French state finances itself - ahead of Sunday's re-election to the parliament in France. The Paris Stock Exchange is also falling - despite rises on all other fronts in Europe - and now the entire stock market rise for the year has been erased.

» Updated: 16 July 2024, 15:06

» Published: 28 June 2024

Crisis Level on French Interest Rates Ahead of New Election
Photo: Christophe Ena/AP/TT

There is a crisis atmosphere on the French bond market – where the French state finances itself – ahead of Sunday's new election to the parliament in France.

The Paris stock exchange is also falling – despite increases on all other fronts in Europe – and now the entire stock market gain for the year has been erased.

The interest rate on a ten-year French government bond has risen to 3.30 percent, which can be compared to 2.46 percent for the corresponding German government paper.

The gap between the two euro countries' bond yields is the largest since the euro crisis in 2012. It's about a risk premium that lenders demand to lend to France ahead of what is feared to be a chaotic political period in the country and worsened problems with budget deficits for the French state.

The Paris stock exchange is also falling – despite increases on all other fronts in Europe – and now the entire stock market gain for the year is gone after a 6 percent fall since the EU election on June 9. President Emmanuel Macron dissolved the French parliament the same evening and announced new elections following strong headwinds for his party in the EU election.

The uncertainty surrounding the French political situation is also pressing the euro, which is currently hovering around the exchange rate of 1.07 dollars per euro, the lowest level against the dollar in about two months.

The market had already doubted the French state's ability to address growing budget deficits before Macron announced new elections.

Credit rating agency S&P Global downgraded France's credit rating at the end of May, and the International Monetary Fund (IMF) has made calculations showing that France's budget deficit is expected to exceed the EU's ceiling of 3 percent of GDP for many years to come.

Tags
TTT
By TTThis article has been altered and translated by Sweden Herald

More news

Japanese households receive part of billion package
1 MIN READ

Japanese households receive part of billion package

Airline Launches Thailand Route from Arlanda
1 MIN READ

Airline Launches Thailand Route from Arlanda

Slight increase in apartment building
1 MIN READ

Slight increase in apartment building

Northvolt's cash would have only lasted a week
2 MIN READ

Northvolt's cash would have only lasted a week

Strike hits French Cognac
1 MIN READ

Strike hits French Cognac

Upbeat in Japan – Gloomy in China
1 MIN READ

Upbeat in Japan – Gloomy in China

Took a tough stance on crypto companies - resigns
1 MIN READ

Took a tough stance on crypto companies - resigns

Ingvar Carlsson on PG: "A very loyal friend"
2 MIN READ

Ingvar Carlsson on PG: "A very loyal friend"

No Wage Guarantee in American Process
1 MIN READ

No Wage Guarantee in American Process

He became "PG" to the entire Swedish people
3 MIN READ

He became "PG" to the entire Swedish people

PG Gyllenhammar has died: "meant a lot"
1 MIN READ

PG Gyllenhammar has died: "meant a lot"

Unstable US stock market ends on a plus
1 MIN READ

Unstable US stock market ends on a plus

Temu's owner shows its hand
1 MIN READ

Temu's owner shows its hand

Nvidia rises in pre-trading on Wall Street
1 MIN READ

Nvidia rises in pre-trading on Wall Street

Reconstruction in the USA to save Northvolt
3 MIN READ

Reconstruction in the USA to save Northvolt

Northvolt: Negotiations are still ongoing
3 MIN READ

Northvolt: Negotiations are still ongoing

Higher Compensation for Job Interviews in Another Location
1 MIN READ

Higher Compensation for Job Interviews in Another Location

Vehicle Giant Warns of Challenges in 2025
1 MIN READ

Vehicle Giant Warns of Challenges in 2025

Unchanged interest rate in Turkey
1 MIN READ

Unchanged interest rate in Turkey

Trump anxiety in the EU over US tariffs
3 MIN READ

Trump anxiety in the EU over US tariffs