Year in Review 2025
In 2025, Prague Finance Institute continued its mission by expanding education, deepening analytical work, supporting young talent, and building a strong professional community.
Dec 22, 2025
French spreads are widening again, with the 10-year OAT/Bund gap at 80 bps, the largest since April.
The Chelhot Rule comes straight from debt dynamics. It says:
Sustainable nominal rate = nominal growth – (primary deficit ÷ debt-to-GDP).
Apply this to France today:
Debt/GDP = 110%
Primary deficit = 3.5%
Nominal growth = 3%
→ r = 3% – (3.5 ÷ 110) ≈ –0.2%*
That’s the nominal rate required just to keep debt stable. Actual market yields are far higher — which is why debt ratios keep drifting up and spreads are widening.
⚓ The clash between debt sustainability and market reality is widening. At some point, the ECB will be forced to choose.