How to explain the increase in a country’s public debt?

How to explain the increase in a country’s public debt?

Crisis from Covid-19 led to a sharp increase in indebtedness audience in France. To repay the part of his debt maturing, the State borrows money on the financial markets, in particular through ‘obligations from Treasury (OAT) to finance its deficit.

What is the debt capacity?

No banking or legal rule sets the debt ratio maximum. The HSCF (High Council for Financial Stability) has recommended since January 2021 a debt ratio maximum of 35% (including loan insurance) against 33% previously.

Who are France’s debt creditors?

For the most part, these are institutional investors (pension funds and insurance funds in particular), but also sovereign investment funds, banks, and even speculative funds. The situation french does not differ fundamentally from that of other European countries.

What is National Debt?

The national debt is the accumulation of the public debt and the private debts (companies and households) of a country. In the United States the national debt represented 499% of national income in 2008, against 1 .

What is the amount of public debt?

To know. For fifteen years, the public debt has greatly increased. It rose from 55% of GDP in December 1995 to 95% in December 2014.

Who are the players in public debt?

As the chart above shows, 79% of public debt comes from the state. Local public administrations (territorial authorities) and social security bodies represent respectively 9% and 11% of the public debt.

Why are individuals holding public debt?

The French state therefore borrows about a third of its debt from national banks and finance companies. Nearly 20% is held by insurance companies, which “buy” French debt securities for life insurance investments. Individuals are therefore indirectly holders of a significant part of the public debt…