Sylvain Catherine judged a response to his tweet to be of poor quality, considering that it already addressed most of the points raised. He particularly disputed the comparison between the France-Germany and U.S.-Germany spreads: according to him, the U.S. borrows in dollars while Germany borrows in euros. The spread between these two countries would therefore also reflect a gap in anticipated inflation — about 0.5 points higher in the U.S. over the past three years — and the policies of two distinct central banks. He noted that the Federal Reserve's key rate was between 3.75% and 4%, compared to 2.5% for the ECB. In his view, comparing France to Germany would actually neutralize these differences. Catherine also rejected the accusation that his estimate of an additional 60 billion in interest would immediately apply the cost of the spread to the entirety of the debt. He clarified that he had written that this amount "would eventually" be reached, without assuming an immediate effect. Regarding the liquidity of the French and German bond markets, he stated that both were among the most liquid. He acknowledged that the Bund constituted better collateral but believed that this was precisely because it was less risky. According to him, a liquidity gap could not explain a spread of 1.6 points and stemmed from the difference in risk between the two countries. He added that the spread did not directly correspond to a probability of default, as it combined default risk with liquidity or "convenience" premium. However, these components would nonetheless reflect the underlying risk gap between the bonds. Finally, he estimated that French bonds could benefit from the same advantages as German ones if they were equally safe and criticized the idea that the spread arose from Germany's greater perceived safety rather than the risk attributed to France. (translated)
