Although the French deficit reached 9.2% in 2020, the interest rate on French national debt returned to above zero on Monday, April 19.
Is France emerging from the era of free currency? In any case, its 10-year bonds no longer borrow at negative interest rates. After approaching the low of nearly -0.4% in December 2020, the French government bond interest rate rose above zero on Monday, April 19. On Thursday, April 22, it was close to 0.1%, the highest level in a year. The leaping of a symbolic milestone.
Since the beginning of 2021, this slow rise in interest rates in the Eurozone is happening. Germany has dropped from -0.6% to -0.2%, the Netherlands has dropped from -0.5% to -0.1%, and Spain has dropped from 0% to 0.4%. Maintaining this gradual and easing tremor for the time being is closely watched. Few states are so sensitive to interest rates. Since the outbreak of the Covid-19 pandemic, in order to maintain the continued economic development, they have assumed unprecedented debt. Thanks to the European Central Bank’s (ECB) large-scale intervention of the lowest interest rate, even negative interest rates, this kind of intervention was realized.
One year after implementing this system, the states found that their public accounts had deteriorated severely. Eurostat’s 2020 European country deficits released on Thursday are a reminder of the historic scale of borrowing. France’s deficit reached 9.2% of GDP and its debt reached 115.7%. It is far from the official standard of the Stability Agreement (3% and 60% of GDP, respectively), which was suspended during the crisis. “Palm” flows to Spain (11%), while Belgium, Greece, Italy, Austria, Romania and Malta account for about 9% or 10%.
In this regard, it is particularly expected that the ECB Council will meet on Thursday. President Christine Lagarde chose not to issue the warning signal.She reiterated her thoughts ” got engaged” From “Maintain favorable financing conditions.” However, she believes that, overall, these measures are in place. Compared with the end of 2020, corporate loans increased slightly, while household loans remained stable. “We don’t just look at prices [des Etats] », It only represents another indicator, emphasizing MI Lagarde. « [Elle] The recent interest rate hikes and the tightening of bank lending conditions did not seem to impress him. “, Pay attention to Jack Allen-Reynolds of Capital Economics.
However, the European Central Bank has not remained active. A year ago, she launched the “Pandemic Plan” (PEPP) has a market value of 1.850 billion euros and is used to purchase government bonds on the market. In her first childbirth in the spring of 2020, she spent more than 100 billion euros per month. Gradually, during the winter, the pace slowed down to about 60 billion euros per month. In March 2021, seeing the tightening of financing conditions, Christine Lagarde announced that it would speed up intervention.