France is down to two choices:
1) Cut the deficit to eventually lower the interest rate bondholders charge on the debt.
2) Leave the euro and go back to the franc so they can inflate the debt away.
A sovereign borrowing in a currency nother than one they control is doomed.
Of course the politicians and the public will opt for the magical third option: "We can continue as we are for one more decade/year/month/day," pick your own time frame.
From Asia Times, October 24:
A synopsis of this week’s subscription-only Global Risk-Reward Monitor newsletter, an indispensable risk-management and opportunity-identification tool for institutional investors and decision-makers
Germany resists as France’s debt troubles threaten contagion
Diego Faßnacht reports that France’s rising borrowing costs and political paralysis are colliding with Germany’s resistance to larger EU commitments, exposing a widening fault line in Europe’s fiscal architecture. The risk is that sovereign-market stress spreads faster than governments can agree on adjustment, burden-sharing or credible backstops....
....MORE (non-French tidbits)
