Salient to Investors:
Jan Techau at the Carnegie Endowment for International Peace said Moody’s downgrade increases pressure on France big-time and gives Germany more of an edge over France.
French debt remains close to the record low reached Aug. 3, showing investors don’t share German concerns. The spread between French and German government 10-year debt is 0.72 percent versus over 2 percent a year ago and 1.43 percent when Hollande took office in mid-May.
Fredrik Erixon at ECIPE said the economic relationship between France and Germany is like a shotgun marriage – Germany helplessly watches the deterioration of the French economy, knowing it will impact Germany and the euro area.