All posts tagged: debt

France gets a reprieve on credit rating, but doubts persist on fiscal outlook – POLITICO

France gets a reprieve on credit rating, but doubts persist on fiscal outlook – POLITICO

“Structural reforms have started to address credit challenges such as high unemployment and weakening competitiveness, but progress in sustainably reducing the budget deficit and government debt is limited,” Moody’s said in its assessment. France’s general government deficit was 5.5 percent of gross domestic product in 2023, significantly larger than the official 4.9 percent target. This makes it “unlikely” that the government will reach its goal of reducing the deficit to 2.9 percent of GDP by 2027, Moody’s said. Fitch also wrote that it will be “difficult” for France to achieve its target “as deficit narrowing measures remain largely unspecified.” France’s high level of government debt and poor record of fiscal consolidation are “a rating weakness,” Fitch said. According to Moody’s projections, France’s debt could reach almost 115 percent of GDP by 2027. French Finance Minister Bruno Le Maire said that the agencies’ decisions should “encourage us to redouble our determination to restore our public finances and meet the objective” of getting the annual deficit below 3.0 percent of GDP in 2027, AFP reported. “We will keep to …

Ratings agencies keep assessment of France’s debt unchanged

Ratings agencies keep assessment of France’s debt unchanged

Paris (AFP) – Two major ratings agencies left their assessment of France’s huge debt pile unchanged Friday, but cast doubt on the government’s debt reduction target. Issued on: 27/04/2024 – 00:05Modified: 27/04/2024 – 00:04 1 min Moody’s maintained France’s sovereign rating at “Aa2” with a stable outlook. Fitch, which downgraded its rating for France last year, left it unchanged at “AA-” with a stable outlook. France’s public deficit widened to 5.5 percent of GDP in 2023, overshooting the government’s 4.9 percent target. And with the debt stock equal to 110.6 percent of GDP, France has the third highest debt ratio in the European Union after Greece and Italy. Read moreFrance avoids S&P credit downgrade despite concerns over national debt The government has set a target of bringing debt below 3.0 percent of GDP by 2027. But both agencies cast doubts. Moody’s said it was “unlikely” that France will hit its deficit target of 2.9 percent in 2027. “Progress in sustainably reducing the budget deficit and government debt is limited,” it said in a commentary. The …

How we all got into debt

How we all got into debt

Student loans continue to burden adults decades after they’ve left school, and credit card debt haunts many Americans. On the flip side, many of us make leveraged investments in our homes, taking out mortgages to buy houses that we expect to appreciate in value. In other words, debt structures American lives in myriad ways. But, as historian Louis Hyman writes, this is a relatively new thing. In the nineteenth century, Hyman points out, if an individual needed credit, they turned to friends, loan sharks, or local merchants. For corner grocers and country stores, these loans were money-losing propositions with no interest charged. Any institution with a lot of money lent it not to consumers but to businesses. “What began with automobiles spread to vacuum cleaners, furniture, radios, and nearly every kind of durable good desired in the great boom of the 1920s.” This changed with the rise of the automobile. In the 1920s, finance companies emerged as middlemen, borrowing from banks and lending to car dealerships, which could then extend financing plans to individual buyers. “For …

Dad Wants To Cut Off His Daughter From Her 0 Monthly Gymnastics Program

Dad Wants To Cut Off His Daughter From Her $600 Monthly Gymnastics Program

Having kids is inevitably expensive, from the rising cost of childcare to ensuring their basic needs are met.  Another factor affecting a parent’s income is the cost of after-school activities, which could be viewed as a lower-level necessity, providing kids with social interaction and building skills that supplement their education.  A dad who’s ‘drowning in debt’ wants to tell his daughter to quit her $600-per-month gymnastics program. The dad to three kids wrote into the r/Money subreddit, wondering what to do about this particularly expensive activity.  He described his financial situation, explaining that he makes $87,000 a year at “a good job,” but he’s still “drowning in debt.” AleksandarNakic / Canva Pro RELATED: Dad Says He ‘Can’t Do This Anymore’ After Paying $123 For Two ‘Cheap’ Dinners & Some Snacks At The Grocery Store While he didn’t get into details, he shared that he has a $750 mortgage and a second mortgage of $500. He used a $40,000 home equity loan to pay off his credit card debt, then “proceeded to rack up an additional 40k …

Kia Joorabchian ‘accosted’ by debt collectors working for agent Saif Alrubie, court told | Football agents

Kia Joorabchian ‘accosted’ by debt collectors working for agent Saif Alrubie, court told | Football agents

One of the Premier League’s best known football agents was confronted by about 12 debt collectors at his office – and separately relieved of his expensive watch at a ­restaurant – as part of an effort to put pressure on him into repaying money, Southwark crown court has heard. Kia Joorabchian – whose clients have included Carlos Tevez, Javier Mascherano and Philippe Coutinho – was “accosted” by associates of another agent, Saif Alrubie, as part of efforts to “intimidate him into handing over bundles of cash”, the jury was told. The supposed incident was relayed to the court as Alrubie stood trial for a separate alleged threat, which has resulted in him being charged with sending an “electronic communication with intent to cause distress or anxiety” to Marina Granovskaia, Chelsea’s director of football when the club was owned by the Russian oligarch Roman Abramovich. Kia Joorabchian. Photograph: Alan Crowhurst/Getty Images The message to Granovskaia was sent as Alrubie pursued payment for what he claims was his role in the transfer of the France defender Kurt …

Break the cycle of debt and dependency that stunts developing countries’ growth | Debt relief

Break the cycle of debt and dependency that stunts developing countries’ growth | Debt relief

The Guardian is right to identify the global sovereign debt crisis as one of the most critical impediments to sustainable development today (Editorial,16 April). Debt relief is urgently needed, but we must also learn the lessons of history. The historic Jubilee 2000 debt relief campaign saw $130bn of debt written off, and yet we now find ourselves in a renewed global debt crisis. This time, action must address the cyclical nature of debt crises. That countries such as Ghana and Sri Lanka are accepting their 17th IMF bailout packages since independence is a stark illustration of how ineffective existing strategies are at breaking the cycle. Bailout packages often come with harsh stipulations, such as budget cuts, that stifle development, worsen living conditions, and leave economies vulnerable to future debt crises. While the IMF chief, Kristalina Georgieva, noted the urgency of debt action ahead of the Spring Meetings, she continued to prescribe budget cuts as a tool to stabilise debt, despite evidence that spending decreases have little effect on debt reduction. In contrast, legislative reform and …

New EU spending rules bring back debt discipline focus

New EU spending rules bring back debt discipline focus

Brussels, Belgium —  With an energy crisis and record high inflation in the EU’s rearview mirror, Brussels believes the time has come for the bloc to focus on ensuring sound public finances. New spending rules will be voted on in the European Parliament on Tuesday. Once in place, each member state will be required to get national spending under control, but with built-in flexibility for investment. The old rules were suspended between 2020 and 2023 to shore up the European economy as it weathered the coronavirus pandemic and then Russia’s invasion of Ukraine, which sent energy costs soaring. Faced with the specter of recession, the European Union believed it was necessary to let deficit targets slip so that businesses and households could be protected. Debt has since exploded in the most vulnerable countries, and the EU came to accept that for the rules to be brought back, changes were needed to make them workable. After protracted negotiations over two years, a final agreement on the reform was reached on February 10. Inapplicable rules The old …

Unregulated ‘identity tracers’ harass people for debts they do not owe | Borrowing & debt

Unregulated ‘identity tracers’ harass people for debts they do not owe | Borrowing & debt

The letter from the debt collection agency arrived out of the blue, and it was intimidating. It informed Joshua Simpson* that he owed £2,212 to Octopus Energy, and accused him of ignoring previous requests to settle the bill. If he did not stump up within 14 days, he was told, further action would be taken to recover the money. Simpson checked his Octopus account – it was in credit. Then he noticed the address where the debt had been accrued between 2022 and 2023. It was his childhood home – which his family had sold 18 years previously. “Since I was only 16 when we left the property, I was astonished that they’d linked my name [to it],” he says. “The debt collection agency insisted I provide a tenancy agreement to prove how long I’ve lived at my current address. I couldn’t, since we bought our home. “They are now actively pursuing me for this debt, causing me a huge amount of stress. We are about to remortgage, and if this debt prevents us switching to …

Debt Matters: Why It’s Time To Position Into Countries With Low Outstanding Debt

Debt Matters: Why It’s Time To Position Into Countries With Low Outstanding Debt

Authored by Robert Burrows via BondVigilantes.com, In an era of economic uncertainty and volatility, the importance of managing national debt has never been more evident. Investors seek stability and long-term growth opportunities, so the spotlight turns towards countries with low outstanding debt. Understanding the Debt Conundrum National debt, often measured as a percentage of a country’s GDP, reflects the amount of money a government owes to domestic and foreign creditors. While debt can be a tool for financing growth and development, excessive levels can pose significant risks to a nation’s economy. High debt levels can impose substantial interest payments as yields rise, diverting funds away from essential public services and investments. Excessive debt undermines a country’s creditworthiness, potentially leading to higher borrowing costs and reduced investor confidence. Economic stability can be fleeting as excessive debt can trigger financial crises, currency depreciations, and recessionary pressures, hampering economic stability and growth prospects. Household debt brings about many of the same issues through different channels, but can be closely linked. High levels of household debt make the consumer vulnerable …

World Bank official calls for shake-up of G20 debt relief scheme | World Bank

World Bank official calls for shake-up of G20 debt relief scheme | World Bank

The mechanism for providing debt relief to the world’s poorest countries is failing to produce results and requires a major rethink, a senior official at the World Bank has said. Indermit Gill, the bank’s chief economist, said that after four years the G20’s common framework – designed to speed up and simplify debt restructuring – had not provided a single dollar of new money. More than half the 75 countries deemed poor enough to be eligible for concessional finance from the World Bank are either in distress or close to it, and Gill said cripplingly high repayments were entrenching poverty. Interviewed by the Guardian at the bank’s spring meetings in Washington, Gill said: “We have to recognise the problems. The common framework won’t deliver what leaders say it will. They are saying: ‘This horse is not dead yet, so let’s just keep whipping it.’” He said a key weakness of the common framework was that private bondholders – an increasingly important group of creditors – were only brought in at the end of debt negotiations. …