Pimco chief says markets send France 'serious signal'; analysts say no debt crisis

Emmanuel Roman, chief executive of asset manager Pimco, said markets are sending France a serious signal and that the situation is grave, in an interview with Le Monde published on 7 October. Le Monde reported that he warned of France's worsening budget deficit and political instability. Roman said he is not withdrawing his investments in French debt, but is not increasing them either, according to the interview.

Analysts said France is not facing a debt crisis despite a recent surge in French borrowing costs, the South China Morning Post reported on 7 October. The surge pushed the spread between France's 10-year bond yield and Germany's to a level unseen since the euro zone crisis, the outlet reported. "The short answer is no, this is not a debt crisis," Stephane Colliac, senior economist at BNP Paribas, said, according to SCMP.

SCMP reported that France's effective interest rate — the average rate it actually pays on its debt — is slightly above 2 per cent, lower than the rising market yields. Analysts cautioned that future uncertainties remain, the outlet reported. SCMP's report also cited political gridlock in France.

The two reports differ in emphasis. Le Monde reported Roman describing the situation as grave, while SCMP reported analysts urging calm. Both cited rising French borrowing costs; Le Monde reported Roman citing political instability, and SCMP cited political gridlock.