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1.997%.That’s how much it costs France — a country that people associated with high government spending, socialism, rich who are fleeing, and a lost AAA ratings — to borrow these days.
We pointed this out yesterday, but the market is basically mocking people at this point.
Of course, it makes total sense. France’s policies might not be so hot on the growth front, but that doesn’t have anything to do with whether it can borrow… that’s only determined by whether markets believe that it’s in “the club” of the Eurozone for the long-term, and like everyone else, implicitly backed by the ECB.
For what it’s worth, short-term borrowing costs are actually ticking higher today, and that’s actually a good sign, as the rush into short-term French and German debt has been a sign of people panicking. People coming out of those areas is a sign of panic receding.