French Credit Risk Soars As Macron Bailout Blows-Out Deficit
by Tyler Durden
ZeroHedge.com
Tue, 12/11/2018
Having bitched and moaned at the utter temerity of the Italians to suggest a growth budget that busts Brussels’ mandated deficit limits, the French are about to make Milan’s defiance look like child’s play.
French Prime Minister Edouard Philippe said the measures announced on Monday by President Emmanuel Macron to appease so-called Yellow Vests protesters will “necessarily” have an impact on the country’s deficit.
“The measures will have consequences in terms of spending and that necessarily implies consequences in terms of deficit and we know it will have an impact on the 2019 deficit.”
Philippe said the government will take measures to avoid accelerating public spending, but for now, it’s not looking good.
Specifically, as the EU pressures Italy to retreat from a deficit of 2.4% of GDP next year, the promises Macron unveiled Monday night, from a 100-euro ($114) a month hike in the minimum wage to abolishing a tax on pensions, are expected to cost around EUR 10 billion (or 0.5ppt of GDP), which, as French Budget Minister Gerald Darmanin indicated, will send the 2019 budget to a deficit at 3.4% of GDP.
And that budget-busting populist bailout for Macron has sent French credit risk soaring to its highest since May 2017
The Rest…HERE
