The unflattering history of the country's taxation is in all minds

Sovereign debt crystallizes the fears, the France can at least pander to be ahead of its annual funding programme, to EUR 188 billion. Yesterday, Paris issued easily 8.3 billion euros of bonds ' spammy ' (OAT), demand was more than twice greater than the amount served. By integrating this award, the France lifted 113,8 billion euros since January, likely more favourable conditions than the entire fiscal year 2009. The weighted average rate paid on medium and long term debt emerged the year last 2.95, according to the France treasure (AFT) Agency, which manages the State debt. Gold market rates have declined since then, to the point that the 10-year bond yields is a historic floor.

"This ahead of the 2010 program does fit well with recent rumours of degradation of the country by the agencies note", said Jean-François Robin at Natixis. Last Sunday, concerns have notably resurfaced after remarks of the Minister of the speaking Budget of an objective "tense" for the maintenance of the "AAA" to the France note. François Baroin corrected shooting by saying then that there was "no risk, no doubt, no question," on the marking of the country.

Good student...

The classification of the France among the pupils is crucial for the financial markets. "In the current context, discrimination between the debt is particularly acute and benefit of the AAA rated States, says Frédéric Gabizon, HSBC.". The French debt is in this case and offers, in an environment of very low rate, higher than the Germany performance. "In fact, in the light of the results of auctions conducted since the beginning of the year, investors ' appetite has blunt is no, no even for very long titles, more risky, such as 50 years issued in March.

But the ease with which spread rumours of degradation of the French debt and the gap historically high rates to 10 years in the France and the Germany (to about 35 basis points) are suggestive. The unflattering history of the country's taxation is in all minds. For after Dexia AM, taking into account the level of primary deficits (before payment of the interest on the debt), 2009, the France is one of the States of the euro area to the larger effort to stabilize the level of debt relative to GDP by 2015... far before the Italy.

... under supervision

However, at this stage, the measures taken by the Government were not really satisfied. "In comparison to the announcements made by the Greece, the Portugal or the Spain, those of the France may seem modest," said one speaker. The Fitch agency acknowledged last week that the change of attitude of the Government on the issue of public finances was notable, but insisted on the importance of implementing a program of ambitious fiscal adjustment. She has recently confirmed "AAA" to the France note, arguing "its exceptional financial flexibility, of relatively robust economic performance, of his broad and stable revenue base." and its diversified and high value-added economy Yesterday, Standard & Poor's also said that the France as the Germany were among the countries of the euro area currently away from recession. "Another important for French debt is that it moves currently two-thirds to foreign investors, which means that there is a vast potential of reserve to domestic buyers," says Frédéric Gabizon.