Lionel Laurent

And so, you know, important, pivotal, I think, for how the markets view French debt.

So this really is this tactic of Macron again is that with the snap election last year and again threatening elections, it's to try and scare the National Assembly into doing what he wants.

Let's hope that something comes out of this which is sensible and a government can be formed.

I mean, if nothing happens, if nothing stands water, actually, the budget deficit will improve.

But the question really is, is that maybe it's 2027 and the presidential election or before that, if we do get either a hard left or indeed the Le Pen socialism version, France is going to be in a very different, painful world.

Mostly the market expects this not to happen.

And at the moment, that's why we're only inching slightly higher.

Good question.

No, I mean that there is something, you know going on at the moment in Holland and their pension system But not so much in France Where the breakdown comes is is used to be called bund plus whereby particularly Japanese investors would happily buy French debt Which is you know larger than even than Italian in scale believing they were getting the equivalent of you know bund security of German sort of type stuff but with an extra spread and

That trade, as I said, no longer happens.

That's where you get the sort of no longer interested in France.

You avoid France.

It's not so much you actively sell.

You just don't put any more money.

And when stuff matures, you don't reinvest it.

And that is, you know, I think where we have a situation if we do get France downgraded by a second or third rating agency.

We've obviously seen Fitch, but we've been over the course of the next two or three months leading up into the end of the year when also they have this excessive deficit procedure they have to get through Brussels.

that you might see that some of the index bond funds have to stop selling because France is no longer sufficiently rated double A and slips down.

So that's one potential thing.

But that, again, will be very much a slow burn.