MonthlyBulle n n 87 April 1 Publica on manager : Ambroise Fayolle Editor : Agence France Trésor Available in French and English http://www.aft.gouv.fr Bloomberg TREX<GO> Reuters <TRESOR> News at Agence France Trésor page 1 Economic news page General debt related data page 3 Secondary market page 5 Nego able government debt page The French economy and interna onal comparisons page 8 Agence France Trésor is tasked with managing the government debt and cash posi ons under the most secure condi ons in the interest of the taxpayer. News at Agence France Trésor Crea on of an internal control and risk management unit Since its incep on in 1, Agence France Trésor has adhered to the principle that internal control and risk management should be independent from opera onal func ons. This involved, among other things, establishing the appropriate organisa- on, outlining and upda ng internal control policy (including risk limits), and monitoring for compliance with policy. From the outset, AFT has complied with the risk control principles set out in Regula on 97- of the French Banking and Financial Regula ons Commi ee (CRBF). Agence France Trésor is audited by the Inspectorate General of Finance and by the French Government Audit Office (Cour des Comptes), par cularly in rela on to the cer fica on of the central government s financial statements; it is also subject to twice-yearly accoun ng audits by an external firm and to an annual review of its pruden al controls by an independent firm. Following the work undertaken in recent years, the French Government Audit Office stated in its 1 report on the cer fica on of the central government s financial statements that the measures implemented in 1 by Agence France Trésor and by the Budget and Accoun ng Audit Department of the Ministry of the Economy and Finance had bolstered the effec- veness and efficiency of the internal control systems concerned. Agence France Trésor sought to go even further, and, while con nuing to have a small staff of 38 people, has decided to formally establish an Internal Control and Risk Management Unit, which was set up in April. The Unit is responsible for regularly upda ng procedures, including the manual of procedures that sets out the general framework in which Agence France Trésor operates and describes the principal management rules for financial opera ons. It also draws up a plan designed to control the risks iden fied at all mes. In addi on, it follows up incidents and ensures that correc ve ac on is taken. To deal with the poten al unavailability of the Bercy site where Agence France Trésor is located, the Unit supervises updates of the Agency's con nuity plan as well as tests performed on the backup sites and ensures that staff are kept informed of this poten al issue and trained to deal with it should it arise. The new Unit also coordinates the audits carried out at Agence France Trésor. It organises legal services for AFT in liaison with the DG Trésor teams, and analyses the poten al impact on AFT opera ons of developments in French and EU law. The new Unit also monitors for compliance with the Ethics Charter at AFT. 1
Economic news France's public finance adjustment path as updated by the Stability Programme 1 17 France's Stability Programme 1-17 was released on 3 April. It brings up to date the medium-term public finance adjustment path, following the 13 budget ou urn and the new revenue and expenditure measures announced by the President of the Republic and the Prime Minister. The Stability Programme confirms the French government's commitment to bring the government deficit in nominal terms to 3% of GDP in 15. The adjustment path is based on a realis c assump on of GDP growth of 1% in 1 and 1.7% in 15, in line with the forecasts of the interna onal organisa ons, and slightly higher than the economists' consensus forecast for 1. In addi on, the target of achieving structural balance (that is, adjusted for cyclical effects on the deficit) in 17 has been reiterated. This will stabilise the debt-to-gdp ra o at 95.% in 15, and then gradually reduce it as of 1. This path thus demonstrates the sustainability of France's public debt. Government deficit and debt ratios (points of GDP) 1 95 8 9 9. 9. 9.5 91. 85 88. 89. 85.1 8 8.1 79. 75 7-1.3 - -. -3. - 5-3.8 -.3-5. -.9 - -7.5-7. -8 55-1 9 1 11 1 13 1 15 1 17 Déficit Government public deficit (Dte) (right-hand-scale) Government debt including financial support for the euro area (ESM, bilateral loans) (left-hand Dette/PIB -scale) y.c. soutien financier à zone euro (MES, prêts bilatéraux) (Gche) Dette/P Debt-to-GDP IB (Gche) (left-hand-scale) The Stability Programme also sets out the fiscal consolida- on measures announced by the President of the Republic during his press conference on 1 January and by the Prime Minister in his general policy statement on 8 April. The 5 billion in expenditure savings in the 15-17 period in addi on to the 15 billion in savings already achieved in 1 will help bring about a reduc on in the government expenditure-to-gdp ra o by over 3 points between 1 and 17, to 53.5% at the end of the period. Furthermore, the measures announced for businesses and households will reduce the aggregate tax and social security contribu on rate to 5.3% in 17. The planned fiscal consolida on now rests en rely on expenditure measures. For the 1-17 period, this approach successfully combines fiscal consolida on, support for growth, and support for compe veness. Breakdown of expenditure measures (15 17) Stabilisation of benefits until October 15 11 Mds 1 Mds -Greater use of outpatient care -Greater use of generic products -Pricing better aligned with therapeutic innovation 18 Mds 11 Mds Maintaining stabilisation of the public sector pay scale index until 17 - Elimination of the general competence clause for départements and regions -Halving the number of regions by 17 Etat Central et opérateurs government and government agencies Collectivités Local government locales Assurance-maladie Health insurance system Securité Social Sociale, protec on hors assurance-maladie system, exclusive of health insurance system
General debt related data Indica ve auc on schedule Short term Medium term Long term Index linked May 1 auction date 5 1 19 15 3 Apr 15 settlement date 7 15 8 June 1 auction date 1 1 3 3 19 5 19 settlement date 5 1 19 3 Jul 1 anticipated or delayed auctions (bank holidays, etc.) Medium and long term nego able government debt at March 31, 1 Nominal value of each line, Medium and long term: securi es issued during the year and total issuance at March 31, 1 5 1 15 5 3 35 35 OAT /1 3 BTAN 7/1 BTANi 7/1 5 OAT 1/17 OAT 5/18 OAT i 7/18 15 OAT 5/19 OAT 1/ 1 OAT 5/ 5 OAT i 7/ OAT 1/7 1 15 1 17 18 19 1 3 5 35 OATi 7/9 OAT 1/3 fixed rate linked OAT / issued before 1 issued in 1 Net issuance at March 31, 1 1 1 1 8 55,1 39, 1, Jan. Feb. Mar. Apr. May June July Aug. Sept. Oct. Nov. Dec. Medium and long term: provisional maturity schedule at March 31, 1 Mois Intérêts Amortissements Apr-1 1.8.7 May-1 1.5. Jun-1 Jul-1 5. 5. Aug-1 Sep-1.1 15. Oct-1 15.9 1.1 Nov-1.3 Dec-1 Jan-15. 17.1 Feb-15 1. Mar-15 3
General debt related data Non resident holders of nego able government debt in fourth quarter of 13 As a % of nego able debt outstanding expressed in market value Nego able government debt by group of holders in fourth quarter of 13 Structure in % expressed in market value 7 7 8 58 5 5 5 5 8,1,3 5,, 7,8 9,3 7, 7,8 7, 5,3, 5,7,1 3,7,,9, 1,9 3,,5 5,1 18.7 1. 1.9.1 non-resident investors French insurance companies French credit institutions French UCITS 1/8** 3/9** /9** 9/9** 1/9** 3/1** /1** 9/1** 1/1** 3/11* /11* 9/11* 1/11* 3/1* /1* 9/1* 1/1* 3/13 /13 9/13 1/13 5.1 others (French) (*) figures revised quarterly (**) figures revised annually Source: Banque de France Source: Banque de France Nego able government debt at March 31, 1 In euros Total medium and long-term debt 1,31,81,75,8 Total stripping activity 1,8,597,5, Average maturity 7 years and 3 days Total short-term debt 18,15,, Average maturity 115 days TOTAL OUTSTANDING 1,5,,75,8 Average maturity years and 33 days Nego able government debt and interest rate swaps at March 31, 1 End 11 End 1 End 13 End Feb. 1 End Mar. 1 Negotiable government debt outstanding 1,313 1,38 1,57 1,78 1,5 of which indes linked securities 1 173 17 178 177 Medium and long term 1,135 1, 1,83 1,3 1,31 short-term 178 17 17 17 18 Swaps outstanding 13 1 7 5 Average maturity of the negotiable debt before swaps 7 years 7 years 7 years 7 years years 57 days 37 days 5 days 13 days 33 days after swaps 7 years 7 years 7 years 7 years years 5 days 3 days days 1 days 31 days
Secondary market Yield curve for French government securi es End of month value, % Average daily volume of medium and long term transac ons 18 3 1 1 1 1 8 1 1 yr 5 yrs 1 yrs yrs 3 yrs 5 yrs 3/1 3/13 3/1 - /1 /1 /1 8/1 1/1 1/1 /13 /13 /13 8/13 1/13 1/13 /1 Source: Bloomberg Source: disclosures by government securi es primary dealers Total stripping and reassembly 5 reassembly stripping strips outstanding (->) 5 3 55 5 1 5 11 1 13 1 Source: Euroclear Primary dealers, repo outstanding at end of month Fixed-rate Floating-rate others 5 55 5 5 35 3 5 15 1 5 /1 /1 /1 8/1 1/1 1/1 /13 /13 /13 8/13 1/13 1/13 /1 Source: disclosures by government securi es primary dealers 5
Nego able government debt Short term debt at March 31, 1 Maturity Outstanding ( ) BTF 3 April 1 8,117,, BTF 1 April 1 8,99,, BTF 17 April 1,93,, BTF April 1 9,5,, BTF 3 April 1 7,,, BTF 7 May 1 8,11,, BTF 15 May 1,975,, BTF May 1 9,19,, BTF 8 May 1 7,15,, BTF 5 June 1 8,37,, BTF 1 June 1,589,, BTF 19 June 1 8,17,, BTF June 1 8,,, BTF 1 July 1 8,5,, BTF July 1 9,78,, BTF 7 August 1 7,759,, BTF 1 August 1 5,3,, BTF September 1 1,98,, BTF 18 September 1,951,, BTF 1 October 1 8,3,, BTF 13 November 1,37,, BTF 11 December 1 3,17,, BTF 8 January 15 8,857,, BTF 5 February 15 8,17,, BTF 5 March 15 7,87,, Medium and long term debt (maturing 1 18) at March 31, 1 ISIN Code Bond Outstanding ( ) Ind. Coeff. Face value Stripped ( ) Maturity 1 8,33,7, FR11 OAT % 5 April 1,79,1,3 FR1183535 BTAN 3% 1 July 1 5,58,, FR139 BTAN.75% 5 September 1 15,,, FR1115 OAT % 5 October 1 1,53,971,99 Maturity 15 138,955,53,353 FR117835 BTAN.5% 15 January 15 17,1,, FR11353 OAT 3.5% 5 April 15,17,313,893 FR11818 BTAN % 1 July 15 3,8,, FR113555 OAT i 1.% 5 July 15 15,99,, (1) 1.1873 13,5,, FR1181 OAT 3% 5 October 15 33,3,, FR11571 OAT.5% 5 November 15 17,5,, Maturity 1 13,99,9,8 FR1191589 BTAN.5% 5 February 1 9,9,, FR188357 OAT 3.5% 5 April 1 35,7,, FR119585 BTAN.5% 5 July 1 31,3,, FR11915791 BTANi.5% 5 July 1 1,578,9,8 (1) 1.1 1,7,, FR18731 OAT 5% 5 October 1 8,789,, 33,59, Maturity 17 17,39,759, FR17353 BTAN 1.75% 5 February 17,3,, FR115331 OAT 3.75% 5 April 17 35,,, FR179 BTAN 1% 5 July 17 19,8,, FR13517 OATi 1% 5 July 17,717,759, (1) 1.19,195,, FR151717 OAT.5% 5 October 17 9,71,, Maturity 18 17,11,59, FR1983 OAT % 5 April 18,8,, FR113935 OAT 1% 5 May 18 3,1,, FR11373 OAT i.5% 5 July 18 7,917,59, (1) 1.8 7,97,, FR17737 OAT.5% 5 October 18 8,7,, FR115357 OAT 1% 5 November 18,795,, (1) face value x indexa on coefficient (face value if coefficient < 1)
Nego able government debt Medium and long term debt (maturing in 19 and beyond) at March 31, 1 ISIN Code Bond Outstanding ( ) Ind. Coeff. Face value Stripped ( ) Maturity 19 9,5,1, FR189151 OAT.5% 5 April 19 31,78,, FR11788 OAT 1% 5 May 19 13,3,, FR1853 OATi 1.3% 5 July 19 11,1,91,1 (1) 1.58 1,5,, FR5791 OAT 8.5% 5 October 19 8,8,39,893,193,93,1 FR17711 OAT 3.75% 5 October 19 31,858,, FR5795 OAT cap. 9.8% 31 December 19 7,7,9 (),9,15 Maturity 9,9,5,5 FR18518 OAT 3.5% 5 April 3,3,, FR15559 OAT i.5% 5 July,19,5,5 (1) 1.98 19,975,, FR19951 OAT.5% 5 October 3,81,, Maturity 1 7,9,11,8 FR119997 OAT 3.75% 5 April 1 3,9,, FR1137 OATi.1% 5 July 1 3,999,11,8 (1) 1.5 3,989,, FR115988 OAT 3.5% 5 October 1 3,73,, Maturity 77,38,,1 FR571 OAT 8.5% 5 April 1,3,939,99 79,88, FR111985 OAT 3% 5 April 33,,, FR189975 OAT i 1.1% 5 July 18,375,8, (1) 1.797 17,1,, FR1133788 OAT.5% 5 October,957,, Maturity 3 81,77,817,393 FR57185 OAT 8.5% 5 April 3 1,,195,93,13,5, FR1187 OAT 1.75% 5 May 3 5,,, FR158591 OATi.1% 5 July 3 1,1,1,9 (1) 1.951 11,199,, FR1938 OAT.5% 5 October 3 33,9,, 7,7, Maturity 5,,79,88 FR11193 OAT.5% 5 May 18,37,, FR11788 OAT i.5% 5 July,3,79,88 (1) 1.79,57,, Maturity 5 17,78,98,118 FR57115 OAT % 5 October 5 17,78,98,118,985,,9 Maturity 3,3,, FR1919 OAT 3.5% 5 April 3,3,, 1,9, Maturity 7 35,78,7,9 FR11875 OAT i 1.85% 5 July 7 9,788,7,9 (1) 1.5737 9,57,, FR11317783 OAT.75% 5 October 7 5,9,, Maturity 8 1,3,893 FR571 OAT zéro coupon 8 March 8 1,3,893 (3),3,3 Maturity 9 37,1,877,17 FR57118 OAT 5.5% 5 April 9 7,19,88,58 3,87,79,5 FR1813 OATi 3.% 5 July 9 9,93,99,89 (1) 1.319 7,993,1, Maturity 3 et plus 151,,51,53 FR188799 OAT i 3.15% 5 July 3 11,771,87,9 (1) 1.9 9,,, FR18735 OAT 5.75% 5 October 3,135,3, 11,73,599, FR17 OAT.75% 5 April 35 1,183,, 5,33,8, FR13711 OAT % 5 October 38 3,889,,,788,95, FR1737 OAT i 1.8% 5 July 1,33,3,1 (1) 1.1381 9,11,, FR177319 OAT.5% 5 April 1 3,5,, 7,58,17, FR11137 OAT 3.5% 5 May 5 8,8,, FR1171975 OAT % 5 April 55 1,9,, 7,33,9, FR18795 OAT % 5 April 1,57,,,378,1, (1) face value x indexa on coefficient (face value if coefficient < 1) () Including coupons capitalized at 31/1/13; not open to subscrip on (3) Revised updated on 8/3/13; not open to subscrip on 7
The French economy and Interna onal comparisons Most recent economic indicators Monthly government budget posi on Industrial output, year-on-year -.1% /1 Household consumption*, year-on-year 1.1% /1 end of February level Unemployment rate (ILO) 1.% 1/13 Consumer prices, year-on-year all items.% 3/1 all items excluding tobacco.5% 3/1 Trade balance, fob-fob, sa ( bn) - 3. bn /1 " " - 5. bn 1/1 Current account balance, sa ( bn) - 1. bn /1 " " - 3.7 bn 1/1 1-year constant maturity rate (TEC1).% 31/3/1 3-month interest rate (Euribor).313% 31/3/1 EUR / USD 1.3788 31/3/1 EUR / JPY 1. 31/3/1 * manufactured products Source: Insee, Minefi, Banque de France 1 13 1 13 1 General budget balance -88.1-75. -18. -.33-17.97 revenue 8.1 31.5 5.35.8.79 expenditure 37.17 37.8 3.1.1.7 Balance of special Treasury accounts 1.1.57-5.97 -.79-7.71 General budget outturn 87.15 7.87.3 7.1 5.8 Source: Bloomberg Public finances: deficit and debt As % of GDP 9 8 7 5 3 1 1.5 3.1.1 3..9.3.7 3.3 7.5 7. 5..9.3 9 9 88 8 8 7 7 8 5 5 8 1 3 5 7 9 11 13 deficit (left-hand scale) debt (right-hand scale) debt excluding impact of European guarantees debt (right-hand scale) debt including impact of European guarantees Source: Insee, 13 17 Stability Programme (/17/13) General government debt in 1 As % of GDP 37.9 5. 5.. 175. 15. 15. 1. 75. 5. 5.. 9. 9. 81.9 17. 9. 1.5 Sources: Eurostat (/13), FMI (/13), Insee (/13) 8
The French economy and Interna onal comparisons French economic indicators metable May 1 June 1 Industrial investments: April 1795 Job seekers Q1-1 (BIT) 7 Foreign trade in March 179 Foreign trade in April 7 Industrial output in March 18 Industrial output in April 13 Balance of payments in March 18 Balance of payments in April 1 Consumer prices: index for April 18 Consumer prices: index for May 15 Quarterly national accounts: first results Q1-1 183 Payroll employment: final results Q1-1 15 Inflation (HICP): index for April 18 Inflation (HICP): May index 1 Payroll employment: provisional results Q1-1 181 New building starts in May Industrial outlook: monthly survey for May 1815 Industrial trends: monthly survey for June 7 Household confidence survey: Mai survey 181 Job seekers in May 7 New building starts in April 181 Household confidence survey: June survey 8 Job seekers in April 1817 Quarterly national accounts: final results Q1-1 1817 Industrial producer prices: May index 1817 General government debt Q1-1 Sources : Insee, Eurostat 1817 Household consumption of manufactured goods in May 9