Sarkozy Under Pressure as France Feels Irish Heat: Euro Credit
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French President Nicolas Sarkozy, fresh from skirmishes over plans to raise the retirement age, is now under pressure to reduce the government deficit as investors punish nations such as Ireland for having too much debt.
The extra yield investors demand to hold 10-year French government bonds instead of German securities of similar maturity reached 50 basis points last week, the most since June. France’s debt costs more to insure against default than in Chile and Malaysia, both of which have lower credit ratings. Its debt will equal about 84 percent of gross domestic product by the end of the year, more than the Netherlands and Germany, according to estimates from the European Commission.