French bond rout timely reminder that central banks do topple governments

Which government is the next target? French observers warn of "Liz Truss-like situation". Just what is that situation and is it coming to a government near you?

16 June 2024. London. In the European “Parliament” elections  opposition parties did well, as expected, since European voters are unhappy about policies of mass immigration by economic migrants and “woke” ideologies. (I have placed Parliament in inverted commas, as the “parliamentarians” have no power to table any laws; these are all made by the unelected Politbureau called the European Commission; the EU elections are fake, but they can reflect the mood concerning popularity of parties, assuming they are not rigged).

In France, Marie Le Pen’s party performed well in the 9 June EU elections. Standard and Poor’s had already downgraded French sovereign debt before the election, in which Macron’s party was not expected to do well: On 1 June 2024 it dropped the French credit rating from AA to AA–, putting it on par with Czech and Estonian debt. Then, on Friday, 14 June, French bond yields surged. In response, the French finance minister, Bruno Le Maire talked about a “Liz Truss scenario” in France: “A debt crisis is possible in France, a Liz Truss scenario is possible”.

Why would a finance minister talk about his own ministerial resort in this way? To understand this, we need to understand just what a Liz Truss scenario really is.

What is a Liz Truss scenario?