From News To Moves
The French government's crisis just deepened, bond yields are climbing, and demographics are working against Europe. For U.S. investors, the trade is clear: own the American infrastructure and security plays that Europe cannot live without.
By Austin Payne
On November 12, France’s political crisis deepened when its National Assembly voted overwhelmingly to suspend President Macron’s pension reform. It’s the latest development after France’s government essentially collapsed in September when Prime Minister François Bayrou lost a confidence vote, exposing a political system that looks less stable by the week. At the same time, France is carrying debt equal to more than 114% of its GDP. Interest costs are rising fast and eating into the budget. By 2029, the country could spend more on debt service than on schools or national defense.
Markets did take notice. The French 10-year yield spiked to 3.46 percent, second only to Italy among eurozone issuers. The euro has weakened over the past two months, and global investors are asking the same question: why hold European assets when the U.S. offers the liquidity, yield, and stability that investors are looking for?
Europe’s long-term demographic backdrop does not help either. 22% of French citizens are now over 65, while the working-age population is shrinking. A smaller tax base has to support a growing retiree population. Not exactly confidence-inspiring math.
Europe faces a potential doom loop: rising yields drive up borrowing costs, which hurt growth and lead to larger deficits, which in turn prompt investors to demand even higher yields to offset the rising risk. Reuters reports the EU might try to escape through tax hikes or targeted infrastructure spending by 2026, but voters hate higher taxes. That makes the political fix less likely than the crisis continuing.
Money hates uncertainty, so when Europe wobbles, capital flows to safety. That usually means it flows across the ocean to U.S. Treasuries and the dollar. The spillover is clear. A stronger dollar makes U.S. markets even more attractive relative to Europe, even if it creates headwinds for U.S. exporters.
When European governments are paralyzed, they delay major projects. They don’t build data centers, they don’t upgrade grids, and cybersecurity investments wait for budgets to pass. Corporations still need those services, so they outsource their needs to U.S. firms with global reach.
The French government’s crisis, rising EU bond yields, and weak demographics expose Europe’s fragility. For U.S. investors, the trade is simple: own the infrastructure, cybersecurity, and grid providers that Europe cannot do without, while holding Treasuries for safety. Capital will keep flowing westward as Europe stalls. Click the winners from this momentum below to learn more.
Europe’s fiscal and political cracks make U.S. infrastructure, cybersecurity, and data providers the winners. ETFs like IFRA, DTCR, CIBR, and SPAM let investors capture these flows. As France wobbles, U.S. investors hold the leverage.
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