French debt and deficits are on the rise, according to a government document acquired by Reuters. As a percentage of GDP, the debt is expected to rise from 77% this year to 83% in 2010, 86% in 2011 and 88% in 20012. The deficit to GDP ratio is seen at between 5 and 5.5% in 2012, the document says.
Why does this matter? Because of a little document called the Stability and Grwoth Pact which was cooked up by the Germans in the run-up to the launch in the euro to constrain their more profligate European “partners”. The SGP sys deficits should not run more than 3% of GDP and debt to GDP ratios should not exceed 60%…C’est la vie!
