Bloomberg Talks

Episode Title: Lionel Laurent And Marcus Ashworth Talk France's Deepening Crisis
Date: October 7, 2025
Guests: Lionel Laurent (Bloomberg Opinion columnist, Paris), Marcus Ashworth (Bloomberg Opinion columnist)
Host/Interviewer: Bloomberg

Main Theme & Purpose

This episode delves into the deepening political and financial crisis in France, focusing on President Emmanuel Macron’s rapidly eroding position, the looming threat of snap parliamentary elections, market confidence (or lack thereof) in French assets, and the larger implications for the European Union’s stability. The episode features an insightful analysis by Lionel Laurent and Marcus Ashworth, who assess whether France risks a market meltdown similar to the UK’s "Liz Truss moment", and what the future might hold for French politics and the Eurozone.

Key Discussion Points & Insights

1. The Political Crisis and Macron’s Last Stand

• Macron’s Strategy:
  Lionel Laurent opens by discussing Macron’s apparent last-ditch effort to avoid snap parliamentary elections, positioning them as almost inevitable due to collapsing support within Parliament and among key allies.
  • “The new rule of French politics is it’s not over till it’s over, but it feels over... Macron wants the Parliament to be pro- or anti-snap elections.” (Laurent, 00:47-01:47)
• Coalition Dynamics:
  Macron is forcing all centrist parties, especially the center-left, to choose between risking their seats in snap elections or attempting another unstable coalition. Energy and momentum are “slipping away hour by hour”.

2. Market Reactions and Bond Spreads

• French Bonds in Focus:
  Marcus Ashworth discusses the significance of widening French debt spreads, noting that while current levels (86 basis points) don’t signify crisis, a move above 100 would trigger market alarm.
  • “A sharper move above 100 would concentrate some people for sure…France is sort of on its own here… It’s a slow, gradual death.” (Ashworth, 02:03-03:17)
• No ECB Bailout, Just Avoidance:
  The ECB isn’t stepping in, and international investors are quietly backing away from French assets rather than selling outright; maturing bonds aren’t being rolled over.

3. France’s “Le Big Short” and Comparison to Past Crises

• Slow-Burning Political Risk:
  Laurent likens France to “Le Big Short”: a slow-moving political risk that markets can model out for now, but which threatens previously stable tax and pension reforms.
  • “Those two things are starting to crack because…all the parties around him, especially the far left, on the far right, want to brush those away…then you get back into old France…with a lot worse budget deficit.” (Laurent, 03:52-05:02)
• Historical Parallels:
  The situation is compared to the UK’s Liz Truss/Brexit saga.
  • “Liz Truss and Brexit are useful barometers of what happens when a country sort of tests its reputation…If the politics gets more radical…you could get a much worse economic situation...approaching a Truss moment.” (Laurent, 08:13-09:11)

4. Macron’s Allies and Rising Panic

• Allies Jumping Ship:
  Discusses key allies, Edouard Philippe and Gabrielle Atal, publicly distancing themselves, signaling that many politicians are already preparing for a post-Macron France.
  • “Backroom himself betrayed his predecessor…This is the rule of French politics.” (Laurent, 05:23)
  • “People are willing to push the boat out a little more in terms of radical proposals. Macron resignation would be a huge bombshell…” (Laurent, 05:51-06:21)

5. The Far-Right’s Economic Platform & Market Perceptions

• Labeling Le Pen:
  Ashworth notes that while media paint Le Pen’s Rassemblement National as “far right”, its economic stance is actually statist, even left-leaning – threatening pension and tax reforms.
  • “The media portrays Le Pen and her crew as far right, but in practice, [they’re] very far left, in socialistic terms…very friendly towards a wealth tax…running back that pension reform…” (Ashworth, 06:26-07:58)
• Market’s Base Case:
  For now, the market is betting against a radical shakeup before 2027, but the risk of disaster grows if the hard left or “Le Pen socialism” take power.

6. Structural Risks in French Bonds

• No Immediate "Truss Moment":
  Unlike the UK’s LDI (liability-driven investment) debacle, France lacks such a “structural idiosyncrasy”, but could face downgrades if more rating agencies strike. This would force some index funds to sell, feeding a slow-burn deterioration.
  • “When also they have this excessive deficit procedure…if France is no longer sufficiently rated double A and slips down...that again will be very much a slow burn.” (Ashworth, 09:24-10:43)

7. French Public Mood and Near-Term Outcomes

• Public Fatigue:
  Laurent reports widespread public disillusionment:
  • “Sick, tired, disgusted, fed up…There seems to be a nihilistic…view in society. Huge distrust of politicians, loss of faith in policy…dangerous for the future.” (Laurent, 10:54-11:30)
• What’s Next?
  Likely outcome is more “Hail Mary moves” by Macron, but snap parliamentary elections by year’s end or early 2026 appear almost inevitable.
  • “I do think parliamentary elections are the most likely outcome, if not the end of this year and start next year.” (Laurent, 11:35)

Memorable Quotes & Notable Moments

• On French Political Momentum:
  • “The gravity I feel is slipping away hour by hour.”
    — Lionel Laurent (01:32)
• On Market Apathy Toward France:
  • “Why buy France? …it’s a slow gradual death.”
    — Marcus Ashworth (02:55)
• On Dissonance Among Macron’s Allies:
  • “Gabrielle Atal…saying on television last night, he doesn’t understand the President’s decisions anymore…Is everyone now just positioning themselves for the next set of elections?”
    — Interviewer (05:02)
• On the French Public:
  • “Sick, tired, disgusted, fed up, whatever you want...loss of faith in policy, disgust almost with the political class.”
    — Lionel Laurent (10:54)
• On the Risk of a “Trust Moment”:
  • “I am concerned that if the politics gets more radical…you could get a much worse economic situation…something approaching a Truss moment.”
    — Lionel Laurent (08:46)
• On Index Selling Risks:
  • “Index bond funds have to start selling because France is no longer sufficiently rated double A and slips down…that again will be very much a slow burn.”
    — Marcus Ashworth (10:09)

Timestamps for Key Segments

• Macron’s Last Stand and Snap Election Dynamics: 00:30–01:49
• Bond Spread Widening & Market Reactions: 01:49–03:23
• Long-term Political Risk in France (“Le Big Short”): 03:23–05:02
• Allies Abandoning Macron: 05:02–06:22
• Far-Right (Le Pen) Economics & Market Implications: 06:22–08:05
• Comparisons to UK “Liz Truss moment”: 08:05–09:12
• Index Selling & Ratings Watch: 09:12–10:43
• Public Mood and What’s Next for France: 10:43–11:45

Overall Tone and Takeaways

The episode maintains a tone of weary realism, with a well-founded anxiety about France’s political trajectory and its implications for markets, the Eurozone, and investor sentiment. Both guests agree that while there isn’t a full-blown fiscal emergency yet, the structure of French politics and the slow erosion of confidence point to increasingly dangerous territory—a classic case of a crisis unfolding in slow motion. Macron is seen as playing his last cards, with little support left, while the French public and political class brace for major upheaval, possibly led by Marine Le Pen or the far left.

Listeners come away with deep context for the headlines: what’s really at stake isn’t just this week’s parliamentary maneuvering, but the whole structure that has underpinned French—and, by extension, Eurozone—stability for decades.