![\"\"](\"https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2025\/09\/image-75-1024x754.png\")
<\/figure>\n<\/div>\n\n\n<\/p>\n\n\n\n
- \n
- FRANCE<\/strong><\/li>\n<\/ul>\n\n\n\n
France has shot to the top of the list of concerns. Opposition parties this week ousted center-right Prime Minister Francois Bayrou over his unpopular plans for 44 billion euros in fiscal austerity as debt has surged past 3 trillion euros.<\/p>\n\n\n\n
Political uncertainty means that reining in debt of more than 100 percent of GDP and a deficit almost double the European Union limit will be difficult. If growth slows or deficit reduction slackens, interest payments could exceed 100 billion euros by 2029, up from 59 billion euros last year, France\u2019s audit office, the Cour des Comptes, has warned.<\/p>\n\n\n\n
It may take a bond market revolt to force a coalition to pass a budget.<\/p>\n\n\n\n
30-year bond yields have reached their highest level since 2009, the cost of long-term borrowing is higher than Spain’s, almost the same as Italy’s, and the risk of further credit rating downgrades has increased.<\/p>\n\n\n
\n![\"\"](\"https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2025\/09\/image-76-1024x738.png\")
<\/figure>\n<\/div>\n\n\n<\/p>\n\n\n\n
- \n
- UK<\/strong><\/li>\n<\/ul>\n\n\n\n
The reshuffle of Prime Minister Keir Starmer\u2019s top advisers and the annual budget scheduled for November have focused attention on Britain\u2019s ability to control its finances.<\/p>\n\n\n\n
Long-term borrowing costs this month shot up to their highest level since 1998, while sterling has tumbled.<\/p>\n\n\n\n
Economists say Chancellor of the Exchequer Rachel Reeves will need to raise taxes by at least 20 billion pounds ($27 billion) to make up for a revenue shortfall caused by weak growth, high borrowing costs and setbacks in spending cuts.<\/p>\n\n\n\n
Britain has the highest borrowing costs and the highest inflation in the G7, making it a target for market anxiety.<\/p>\n\n\n\n
Britain is a little less worrisome than the United States or France, because it is easier to find political will in the United Kingdom to make changes.<\/p>\n\n\n
\n![\"\"](\"https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2025\/09\/image-77-1009x1024.png\")
<\/figure>\n<\/div>\n\n\n<\/p>\n\n\n\n
- \n
- USA<\/strong><\/li>\n<\/ul>\n\n\n\n
The world\u2019s largest economy has not escaped the attention of the markets. Its nominal debt is nearly $37 trillion.<\/p>\n\n\n\n
President Donald Trump, with the tax cuts and spending bill he signed into law on July 4, could add an additional $3.3 trillion over the next decade, according to the independent Congressional Budget Office.<\/p>\n\n\n\n
It\u2019s true that the world\u2019s deepest and most liquid capital markets provide a cushion, but rising debt means investors are demanding more compensation to hold U.S. bonds. Signs of weak demand at recent auctions are worrying.<\/p>\n\n\n
\n![\"\"](\"https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2025\/09\/image-78-1024x601.png\")
<\/figure>\n<\/div>\n\n\n<\/p>\n\n\n\n
- \n
- JAPAN<\/strong><\/li>\n<\/ul>\n\n\n\n
Japan\u2019s high debt, one of the world\u2019s largest, is no secret. What has changed is that the prospect of higher interest rates as inflation returns has pushed borrowing costs higher, bringing high debt to the fore as the Bank of Japan scales back its bond purchases.<\/p>\n\n\n\n
Demand at recent auctions has been weak, adding to the market pain.<\/p>\n\n\n\n
Political uncertainty following the resignation of Prime Minister Shigeru Ishiba has also helped push 30-year bond yields to record highs as speculation grows that his successor will spend more.<\/p>\n\n\n
\n![\"\"](\"https:\/\/www.liberalglobe.com\/wp-content\/uploads\/2025\/09\/image-79-1024x639.png\")
<\/figure>\n<\/div>\n\n\n<\/p>\n\n\n\n
- \n
- GERMANY<\/strong><\/li>\n<\/ul>\n\n\n\n
Debt sustainability is not an immediate concern for Germany. It has the lowest debt-to-GDP ratio in the G7 and can spend more to boost economic growth.<\/p>\n\n\n\n
However, markets are paying attention because the massive bailout package means Germany is borrowing more through bond sales.<\/p>\n\n\n\n
30-year bond yields are at their highest level since 2011 – and that is a dangerous development. High investments in infrastructure and defense, just confirmed in the 2025 budget, bring the planned spending to 591 billion euros, including investments from the infrastructure fund and the special 100 billion euros for defense.<\/p>\n\n\n\n
That is why supply is increasing, said Thanos Chonthrogiannis, Chief economist at Trust Economics.<\/p>\n","protected":false},"excerpt":{"rendered":"
Some of the world\u2019s largest economies are at the center of a bond market storm, as investor concerns grow that governments are making the…<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5,860],"tags":[3783,474,489,252,70],"class_list":["post-26092","post","type-post","status-publish","format-standard","hentry","category-economic","category-fiscal-economics","tag-britain","tag-france","tag-germany","tag-japan","tag-usa"],"_links":{"self":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/26092","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=26092"}],"version-history":[{"count":1,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/26092\/revisions"}],"predecessor-version":[{"id":26099,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=\/wp\/v2\/posts\/26092\/revisions\/26099"}],"wp:attachment":[{"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=26092"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=26092"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.liberalglobe.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=26092"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
- GERMANY<\/strong><\/li>\n<\/ul>\n\n\n\n
- JAPAN<\/strong><\/li>\n<\/ul>\n\n\n\n
- USA<\/strong><\/li>\n<\/ul>\n\n\n\n
- UK<\/strong><\/li>\n<\/ul>\n\n\n\n