Don’t panic

The Financial Times reports on the French reaction to German plans to impose debt writedowns on investors in bailed out countries. According to French finance minister Bruno Le Maire, France is opposed to any form of “automatic” mechanisms as this would effectively sideline the primacy of democratic decision making and therefore strengthen Eurosceptic populism. The article quotes Lucas Guttenberg, senior researcher at the Jacques Delors Institut – Berlin, who describes the field of conflict regarding public debt reform. “We all know that we need something to prevent unsustainable debt stocks moving from private balance sheets to the ESM before they get restructured. The big question is how to get there without causing a market panic.”

You can read the article here.