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How France is turning into the 'Turkey of the 21st century' in the eyes of the markets: French debt rates reach Italy's level; a silent alarm for the eurozone that is seeing the fall of another "strong"...
Europe is experiencing an unusual move in financial markets. For the first time, France, the financial and political heart of the eurozone, has been put in the same boat as Italy in terms of public debt risk. The difference between the yields on French and German ten-year bonds (the so-called spread) has narrowed so much that markets are considering Paris as another weak link in the European chain.
A country that for decades has been synonymous with fiscal stability and international credibility is now perceived as the “new sick man of Europe.” The rise in borrowing costs for France, which is already going through some difficult political and social moments, is a clear signal that investors are looking more critically at this great continental power.
At the same time, Italy has seen a relative decline in its debt ratios, further narrowing the gap with Paris. On the one hand, this is an indication of Rome’s temporary fiscal discipline; on the other, it is a warning to France that its “untouchable” status in the Eurozone could soon be undone.
The European Central Bank, despite having safeguards in place such as the Monetary Transmission Protection Instrument (MTPI), has not yet signaled a specific intervention. But its silence speaks volumes: if France escalates into a crisis, then for the first time we will have a “major” eurozone country that risks disrupting the monetary stability of the entire bloc.
For countries like Albania, which closely follow European financial developments and depend indirectly on EU investments and capital, this is a move that should be read carefully. A financial crisis in France means less investment in the region, tighter lending conditions and a more hostile atmosphere for small economies seeking to enter the European orbit.
Europe is changing, and for the first time, historical roles are being reversed: Italy appears more stable, while France, whose fiscal peace has been taken for granted, is being shaken. The markets are forgiving. And now, Paris is on its knees.
Europe has entered a new era where no one is untouchable. And when Paris takes on the role of the shaken "Sultan," then we should all prepare for greater upheavals.
In this context, the legendary motto of the French Revolution: Liberté, Égalité, Fraternité, is being transformed into a new reality: Liberté, Égalité, Fragilité. France is still free and formally equal at the European table, but noticeably more fragile in the eyes of the markets./ Pamphlet
* Liberté, égalité, fragilité- Freedom, equality, fragility
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