Honoring the debt could destroy the political coalition necessary to govern France; defaulting could destroy the financial capacity needed to carry out its policies. Default, which is an actual possibility, would have strongly deleterious effects on German banks. There could well be a ripple effect in Europe.
France’s basic problem continues to be that its large public debt impedes its growth and its participation in the euro renders it unable to monetize its debt.
As I said before, all of this is primarily of concern to me because of the prospective impact on France’s defense posture.
