Finance has gone from foe to friend for France’s Socialist government.
During his election campaign in 2011, President Francois Hollande famously called finance his “greatest adversary.” In a speech today, French Finance Minister Michel Sapin called finance “a friend,” quickly specifying that he was talking about “good finance.”
“Is there a happy finance in the service of happy investments,” he asked as he adressed an economic conference in Aix-en-Provence, France. “Our friend is finance, good finance.”
The Hollande government’s new stance on finance comes as the president’s popularity is at a record low and his economic policies have drawn the ire of members of his own Socialist Party and of allied groups. Recovery in Europe’s second-largest economy remains anemic and joblessness is at a record high.
Global finance, however, has stuck with Hollande. Investors have piled into French bonds, giving Hollande’s government borrowing costs that are close to the lowest on record.
The yield on France’s benchmark 10-year bond is at 1.694 percent. The spread between French and German 10-year debt is 43 basis points, down from the 1.44 percentage-point premium when Hollande was sworn in on May 15, 2012.
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