Financial Vultures Put France Under Pressure

Former French Prime Minister Francois Bayrou’s defeat in Parliament over his massive austerity plan has raised the probability that rating agencies will lower France’s status next week, based on expectations that fiscal “discipline” won’t be enforced, at least in the short term. However, hedge funds are already shorting French bonds, leading to an increase of the costs of debt rollover already. For the first time in history, yields on French bonds are the same as those of Italy, until now considered to be the EU member with the highest financial risk.