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3 weeks ago
Mohamed El-Erian, Allianz‘s Chief Economic Advisor, warned on Wednesday about the growing intersection of political and economic challenges in France following Prime Minister Michel Barnier‘s historic no-confidence ouster, even as Greek bonds achieved parity with French sovereign debt for the first time since the Eurozone crisis.
What Happened: “What we are seeing in France these days is yet another example of messy politics contaminating economics,” El-Erian wrote on X, distinguishing the current situation from Britain’s 2022 “Liz Truss moment” due to France’s Eurozone backing and different global financial context.
The political upheaval comes as Greek 10-year sovereign bonds closed their yield gap against French bonds in late November, trading below 3% – a remarkable turnaround from the peak of the Eurozone crisis when Greek bonds yielded 40 percentage points more than French debt.
