The European Stability Mechanism (ESM), the eurozone’s crisis-response fund, is concerned about France’s financial position as the country faces rising borrowing costs. The institution can lend up to €500 billion to countries that can no longer finance themselves, but its managing director says an intervention is not currently warranted.
On October 27, France was paying an interest rate of 4.94% to attract investors to its debt, according to figures presented by Francis Dassyras, who leads the ESM’s debt issuance. That was higher than the rates cited for Italy, at 4.5%, and Greece, at 4.3%.
Dassyras previously managed Greece’s debt issuance for around 12 years, leaving his post in May 2011 after the country had faced budget deficits, investor distrust and an international bailout. He now works at the Luxembourg-based ESM, which has 230 employees.
Greece is repaying some of the loans it received between 2012 and 2015 ahead of schedule this year. The article notes, however, that the country continues to bear the effects of austerity measures: Dassyras says his pension will be half the amount he might have expected before the crisis.
The ESM’s managing director said there was no reason for the institution to intervene in France at this stage.
Sources: Le Monde Économie.