The resilience of France’s long-term interest rates to bad news

We compare the fundamental features of the German, French, Spanish and Italian economies that may influence their fiscal solvency and financial stability: Long-term fiscal solvency; The level of potential growth; The situation of the trade balance; The determinants of long-term growth: capital modernisation, labour force and youth skills, corporate investment; The capacity to increase the tax burden or reduce public spending to restore fiscal solvency. We observe that France and Italy rank joint last in this comparison of structural features . And yet France’s long-term interest rate remains close to that of Germany and significantly lower than those of Spain and Italy. Why is France’s long-term interest rate this resilient ? Investor habits? Excess demand for core euro-zone risk-free bonds? Investor perceptions that France’s reforms are going to improve its structural situation?