France does not have the most shining image when it comes to the vitality of its economy or the strength of its growth.
And yet investors are visibly delighted to lend their money to the country, whose signature acts as a golden ticket — it is above all a solid promise of a secure repayment, which in these times of defaults is welcome, but also of a return on investment… Even if it is small.
Thus, France was able to raise 4.711 billion euros over 10 years at a rate of 0.46%. A record in this regard for the French Treasury Agency, which is in charge of placing France’s loans on the international markets. Investors are literally scrambling for French debt, which is considered safe and trouble-free.
Despite very low levels, French rates continue to fall. In February, the Agency raised funds at a rate of 0.61%; this was also unprecedented… In March, the country placed at 0.67%. The Agency also borrowed 1.38 billion euros over 11 years at 0.51%.
With yields ever closer to zero, investors do not gain much by lending to France.
And it’s even worse on the secondary markets, where the 10-year yield on French debt stands at 0.452%!
Despite an economy still faltering (even though a slight upturn seems noticeable since the beginning of the year), France benefits from the boost of the ECB’s quantitative easing program, which, by injecting billions of euros into the market, mechanically lowers the rates.
And this is also the case for other countries like Germany, whose 10-year rate is also approaching zero at 0.16%…
Let us recall that in 2012, France was borrowing at… 3.46%!
