But why does the inflation of the French public debt not worry the business community?

©Ludovic MARIN / POOL / AFP

While the‘public debt indebtedness affects 120% of GDP and is not on the scoreboards of the house France n‘indicates a weakening trend that may reduce this threat, the monetary and financial markets are not worried. While for six months, the government has increased support for an economy that is barely funded, the markets have not moved.‘one iotathe d‘usually, reflect the risk assessment taken by a borrower.

Because, really: the situation of the house France n‘is not glorious.The draft budget remains attached to a likely growth forecast in 2023 of 1% (against more than 3% in 2022). It will not allow to reduce the deficit (around 5.5%). Bercy refrained from drastically reducing operating expenses (salaries and the number of civil servants). Bercy maintains the goals of‘increasing resources for health, education and security, justice, defenseand adding new aids for victims of‘inflation. L‘Bercy and Matignon’s goal is to prevent accidents in the social field, c‘ie neck movementetype yellow vests again, which will ignore the society and worsen povertyis to manage, which has been real since the pasteres election since the government, n‘the absolute majority is gone. It is obligatory to do with the relative majority and l‘use of 49.3… which is not allowed‘pillow the collareunderlying.

On the Banque de France side, we remain stuck in the budget forecasts, suggesting that in the international situation, it will be difficult to stay at the 1% level.

Surprisingly, the president blames his administration and mineday ofehtoo pessimistic, recently acknowledged that in his opinion, the growth performance in 2023 will be very weak, around 0.6%. What is frank to mediocre

All this means that France will continue to live on credit in 2023 and beyond‘grateful vs‘is D‘more worrying because the debt service represents more than 90 billion d‘euros per year.

In general, the‘Therefore, the French administration needs to find 400 billion‘euros per year. That represents 7,000 euros per second, 25,000 euros per French household, ie pres of 120% of the wealth created in‘year, provided that the engine continues to operate.

These numbers that should be feared n‘any economic actor usually composed, allows some political leaders to cry out by announcing a state close to bankruptcy…. These figures, in fact, are greeted with great calm and even d‘market indifferences.

The rating agency S&P Ratings, for example, announced the maintenance of the French debt rating, but that doesn’t rule out its decline in the coming months. In question, the economic slowdown in France and the deterioration of public finances related to the aid paid to households and businesses to offset inflation, and especially the increase in energy prices.

On his sideMoody’s agency maintained its rating atlong-term local and foreign currency issuesefrom the French governmentice in Aa2. “The outlook remains stable,” Moody’s said last Friday.

All is well, Madame la Marquise and everything is going as if France has a way‘pillow the‘debt increase. The rates of‘interest rate increases in the context of the central bank, but these rates are not yet considered risky. So France is looking every week for all the‘money it needs in the market at a reasonable rate very close to that at which the Germans, considered exemplary, borrowed on their side.

For the markets, France does not need any particular risk. And surprisingly, there are many‘politicians of‘opposition to Macronism seems regrettable.

Rating agencies, which act as watchdogs for lenders, noted that deficit forecasts had worsened.They noted that we will face difficulties if, for example, the western world enters a recession or if the French president does not respect his schedule of planned structural reforms. But for‘wait, “it works…” say money market players.

In fact, the two most listened to agencies, S&P and moody‘s, monitor the state of evolution of economic performance in the country but also evaluate the state of progress of structural reforms, productivity gains, stable budget consolidation and stronger than expected economic growth.

The two agencies report that markets have no illusions about President Macron’s ability to quickly reduce his public debt, but they considerethe reforms launched in pensions and in energy transfer, also the restoration of the nuclear fleet, are positive elements that make it possible to support a large debt for a long time. System reform actionseme French, added to the maintenance of‘a guarantee of the European Union and in particular of the pooling assumed by France and by‘Germany, allows loans that exceed the standards of‘orthodoxy.