as long as rates remain low, the situation is sustainable

DECRYPTION – This debt at very low cost, it is possible, however, that if France is to remain credible with investors.

The ministry of Economy and Finance, in Paris.
The ministry of Economy and Finance, in Paris. BERTRAND GUAY/AFP

With a debt that exceeded 100% of GDP in the first quarter and is expected to reach 121 % by the end of the year, France is indebted as never before to face up to the consequences of the crisis of the sars coronavirus. The strong recession in the economy habs – and those of other countries of the world – shattered the european fiscal rules already little respected in normal times. France is now very far away of having a public debt limited to 60 % of GDP, as the world would want to treated. Up where the Hexagon, then, can he live on credit, without risking a collapse?

“Any reduction in the debt to GDP is an approach summary and misguided. It should, rather, look at what is the cost of debt and today, it does not cost much“said Bruno Cavalier, chief economist at Oddo BHF. In other words, the country is still borrowing rates very low, which guarantee in large part, the sustainability of its debt.

This situation is mainly a result of

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