French budget dispute unlikely to trigger Greece-style economic collapse

“Down the line you may end up in a situation where markets get more nervous, so I think [Barnier] is right to be concerned,” Sander Tordoir, chief economist at the Centre for European Reform, told Euractiv. “But to draw a really gloomy apocalyptic scenario – [that’s] just a political tool to remind all the parties in France that they need to find a solution.”

...“French yields are still not incredibly high,” Tordoir said. “They’ve converged on Greek ten-year yields, but that mainly reflects an incredible, eye-watering improvement on the Greek front rather than a massive deterioration on the French front.”

...Tordoir noted that the ECB’s warning should be read as “a shot across the bow” to encourage member states to address their high debt levels and deficits, rather than as a warning that any financial collapse is imminent.