This symbolic day has been a great success for Italy. The Italian population was called Monday to participate in a "day Treasury bills." Investors bought the national debt to support - at their level - the huge debt of Rome (1900 billion) and prohibitively high interest rates of over 7% imposed by the markets. The figures have not been made public but the public offering - which proposed a rate slightly lower than the market - would have raised close to 1, 1 billion as the government expected more 350 million euros. Italy is not alone in resorting to the popular savings: Belgium also announced last week the opening of a national loan to individuals. France could she be tempted to imitate them? To believe a survey conducted by Harris, it would have to convince the French: less than one in three is apparently ready to buy national debt. And for that we should answer a few questions:
France has she need?More debt is held by investors 'domestic', the less will be subject to market fluctuations. In the case of Italy, the debt is 50% owned by residents, which is far from the case of France, which has borrowed two thirds of its debt outside of France. "It's always better to rely on domestic savings, there is less volatility on international investments types of U.S. pension funds," said Jean-Francois Robin, strategist at Natixis. However, market fluctuations have so far not really hit the hexagon. Interest rates on debt are still at very sustainable. At ten, it is funded at 3.6% in the low levels it experienced historically (between 3.5 and 4%).Moreover, it is not certain that this call to the public quiet level of interest rates. After the "day Treasury bills", the Italian rate jumped again (to 7.8% at three years and 7.2% at ten years) at a lift of 7.5 billion euros. The lull will not last long.
How the French would they lend?In 2012, France plans to borrow 179 billion euros of bonds and long-term markets. French investors are able to invest 8% of their gross disposable income in debt, 100 billion. The savings rate is actually hexagonal 17%, but this must be reduced to 9% refund of real estate investments. "One can imagine that in the case of a public offering, up to 20% of this amount would be affected, or 20 billion euros," said Philippe Crevel, general secretary of the Circle of investors. The amount is not negligible. But for the state, it is not necessarily a bargain.
Is this a good deal for the state?Not necessarily. This could in fact it cost more to raise the money from individuals as with markets. "When the Treasury wants to make such a waiver in the markets of four billion euros, everything is automated. The agency's treasury can press a button to start the process. In the case of a appeal to the public is much more complicated: you have to organize this public offering, manage transactions and do a lot of communication beforehand. All this costs money in the budget, "said Philippe Crevel.
In addition, unlike Italy, has sold government securities slightly below the market rate, France could be forced to do the opposite. Simply because the interest rate on the French debt are not so far from other money market investments. The rate of life insurance are actually 3.5% and those of Booklet A of 2.5%. "To the envy of individuals, they must be given a" susucre "which takes the form of an advantage over the rate or tax benefit," said Philippe Crevel. Which would make the call of public savings less interesting than the fundraising market.
What are the lessons of previous loans in France?The French history also shows that domestic borrowing may not have been a good solution. Pinay loans in 1958, and Giscard in 1973 materialized by white elephants for the state precisely because of the indexation of securities on the gold or tax benefits that were decided at the time to draw the savings. In addition, the household savings into investments already subscribed useful to France. "If the state uses the savings, individuals will withdraw their money from their A booklet which funds social housing and their Codevi which funds industry," said Jean-Louis Mourier, an analyst at Aurel BGC. The "day Treasury Bill" French is perhaps not tomorrow ...
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France has she need?More debt is held by investors 'domestic', the less will be subject to market fluctuations. In the case of Italy, the debt is 50% owned by residents, which is far from the case of France, which has borrowed two thirds of its debt outside of France. "It's always better to rely on domestic savings, there is less volatility on international investments types of U.S. pension funds," said Jean-Francois Robin, strategist at Natixis. However, market fluctuations have so far not really hit the hexagon. Interest rates on debt are still at very sustainable. At ten, it is funded at 3.6% in the low levels it experienced historically (between 3.5 and 4%).Moreover, it is not certain that this call to the public quiet level of interest rates. After the "day Treasury bills", the Italian rate jumped again (to 7.8% at three years and 7.2% at ten years) at a lift of 7.5 billion euros. The lull will not last long.
How the French would they lend?In 2012, France plans to borrow 179 billion euros of bonds and long-term markets. French investors are able to invest 8% of their gross disposable income in debt, 100 billion. The savings rate is actually hexagonal 17%, but this must be reduced to 9% refund of real estate investments. "One can imagine that in the case of a public offering, up to 20% of this amount would be affected, or 20 billion euros," said Philippe Crevel, general secretary of the Circle of investors. The amount is not negligible. But for the state, it is not necessarily a bargain.
Is this a good deal for the state?Not necessarily. This could in fact it cost more to raise the money from individuals as with markets. "When the Treasury wants to make such a waiver in the markets of four billion euros, everything is automated. The agency's treasury can press a button to start the process. In the case of a appeal to the public is much more complicated: you have to organize this public offering, manage transactions and do a lot of communication beforehand. All this costs money in the budget, "said Philippe Crevel.
In addition, unlike Italy, has sold government securities slightly below the market rate, France could be forced to do the opposite. Simply because the interest rate on the French debt are not so far from other money market investments. The rate of life insurance are actually 3.5% and those of Booklet A of 2.5%. "To the envy of individuals, they must be given a" susucre "which takes the form of an advantage over the rate or tax benefit," said Philippe Crevel. Which would make the call of public savings less interesting than the fundraising market.
What are the lessons of previous loans in France?The French history also shows that domestic borrowing may not have been a good solution. Pinay loans in 1958, and Giscard in 1973 materialized by white elephants for the state precisely because of the indexation of securities on the gold or tax benefits that were decided at the time to draw the savings. In addition, the household savings into investments already subscribed useful to France. "If the state uses the savings, individuals will withdraw their money from their A booklet which funds social housing and their Codevi which funds industry," said Jean-Louis Mourier, an analyst at Aurel BGC. The "day Treasury Bill" French is perhaps not tomorrow ...
http://businesnew.blogspot.com/
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