Will France Be the First Country to Collapse Under the High Interest Rate Bomb? (Park Jong-hoon's Knowledge in One Shot)

As government bond yields rise together across advanced economies worldwide, the speaker assesses France as being in a more precarious position than the United States, with a growth forecast of 0.4% and a government bond yield of 4.87%. The speaker explains that Japan's Sumitomo Mitsui DS Asset Management selling French government bonds and the widening spread over German bonds signal an erosion of foreign investor confidence. The speaker highlights a vulnerable investor structure, including foreign ownership of 55% of French government bonds, Japanese holdings of 750 hundred-million dollars, and hedge funds accounting for half. The speaker says that, as in Korea in 1997, Japanese money is leaving first, and that France, as a eurozone member, must comply with stringent fiscal rules to receive ECB support. The speaker argues that in an era of high interest rates, countries whose growth has stalled collapse before countries with heavy debts, and contrasts Greece and Italy, which reduced their debt, with France, which increased it. The speaker analyzes France as having entered a vicious cycle in which debt increases interest costs, with interest expenses accounting for 2.9 percentage points of its 5.1% fiscal deficit. Citing France's mistake of squandering the boom in 1999, the speaker recommends that Korea save resources during prosperous times and prepare its growth system and government bond market for stability. All directional forecasts are the speaker's conditional judgments, not definitive predictions of short-term prices.