The European Central Bank has no automatic trigger for French bond purchases, while one Société Générale economist expects market attention to persist beyond the 2027 elections amid fiscal uncertainty, FXStreet reported Monday.
FXStreet's Nov. 2 report attributed that outlook to Société Générale economist Anatoli Annenkov. FXStreet quoted Annenkov as saying, “the bar for intervening remains high.”
Eurostat reported Oct. 21 that France's general government deficit was 5.1% of gross domestic product in 2025 and public debt was 115.7% of GDP. The European Commission lists France under an Excessive Deficit Procedure. In a 2025 recommendation, the Council of the European Union set 2029 as the procedure's end date and limited nominal net expenditure growth to 1.2% in each of 2026 and 2027. The ECB includes compliance with the EU fiscal framework among TPI eligibility considerations, but its published criteria do not make France's procedure status a standalone verdict on access to the tool.
The TPI lets the ECB buy eligible public securities on secondary markets with one to 10 years remaining to maturity. The instrument addresses market moves only when they are both unwarranted and disorderly and seriously threaten the transmission of monetary policy. The Governing Council's decision draws on market and transmission indicators, proportionality, and fiscal and macroeconomic eligibility. The ECB has not set a yield-spread level that automatically starts purchases. Other TPI considerations include debt sustainability and sound macroeconomic policies.
The ECB's separate Outright Monetary Transactions (OMT) program targets bonds with one to three years remaining and requires strict and effective conditionality tied to an appropriate European Financial Stability Facility or European Stability Mechanism program.
Annenkov expects attention to continue beyond the 2027 elections, with volatility risks persisting until a credible fiscal strategy emerges, FXStreet reported.
