Markets sensitive to budget deficits and debt after PM Francois Bayrou resigns
A French flag flutters on top of the National Assembly ahead of a confidence vote that the French prime minister Francois Bayrou lost. Photo: Reuters
A measure of France’s borrowing costs exceeded Italy’s for the first time in the eurozone’s history, demonstrating how investor concerns over fiscal policy are redrawing the region’s bond markets.
The shift yesterday was due to technical reasons, as the underlying bond used for benchmark French 10-year yields moved to a slighter later maturity than the Italian equivalent. But the trend towards convergence between the two nations’ debt has been years in the making.