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Investors will pay to lend to France

Investors have agreed for the first time to lend at a loss – because France is so much safer than some other countries

FOR the first time ever France has been able to borrow at a negative rate – that is it will pay back less than it gets.

The country has joined a select group of countries, including Germany, Denmark and the Netherlands which have been able to do so this year.

The feat comes as investors are seeking safe places to put their money, worried about the instability of the southern European countries like Spain and Italy.

Agence France Trésor, a body which manages the government’s debt, has just put out three-month Treasury Bonds at rates of -0.005% and six-month ones at -0.006%.

France had only intended to borrow €7.7billion but was offered nearly three times as much, €20.4billion, and was able to negotiate the lower rate.

Investors will get back their money, less about €1million, after the three or six months.

France is also borrowing at low rates in the long-term – last month the agency put out 10-year bonds at 2.46%, a historic low.

This is good news for France as it shows there is still confidence in the French economy.
Photo: © gcpics #42607120

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