‘FROGS’: France’s slow-burn debt crisis (opens the source in a new tab)
- Columnist Lionel Laurent says France’s bond risk premium is at a decade-plus high, with a deficit above 5% of GDP, debt near 120% and the gap over German bonds at new highs.
- FROGS, coined by research firm Rexecode, stands for French Oversized Government and Social Security; he expects a slow squeeze rather than a sudden, Truss-style shock.
- Debt sharing with northern Europe is off the table, and any ECB rescue risks a populist backlash, with next year’s presidential election looming.
- >5%
- budget deficit, of GDP
- ~120%
- debt to GDP
Why it matters Bond markets, not voters, may now set France’s budget.
Other side He concedes France is no Greece: its economy is large and diversified and its banks well capitalised, ‘too big to bail’, as one economist puts it. Squeeze, or scare?