Déjà Vu i Paris

French Bonds Face Risk of Forced Sales If Credit Score Cut

The latest crisis has laid bare the nation’s precarious fiscal and political situation, which is likely to factor into crunch decisions from Moody’s Ratings and S&P Global Ratings over the next six weeks. 

If either downgrade, bond funds with ultra-strict investment criteria are likely to be compelled to offload their French sovereign debt holdings.

Bloomberg 16 October 2025

https://www.bloomberg.com/news/articles/2025-10-16/french-bonds-face-risk-of-forced-sales-if-credit-score-cut-again

Just over a week ago, Sebastien Lecornu was France’s prime minister, and the country urgently needed to forge agreement over a new budget. He then dramatically quit last Monday.

Now France still needs a fiscal plan, and the baton of mustering support for it has passed to a new premier: Sebastien Lecornu. His finance and budget ministers are the same too. 

Plus ça change, as they say in Paris.

Lecornu has warned that failure to pass a budget will push up the country’s deficit to around 6% of output next year. That would be double the 3% limit mandated by the European Union.

Tuesday, the Global Financial Stability Report may provide more backing for Georgieva claim that “valuations are heading toward levels we saw during the bullishness about the internet 25 years ago.”

Bloomberg 13 October 2025

https://www.bloomberg.com/news/newsletters/2025-10-13/france-s-old-and-new-premier-still-needs-a-budget