The voluntary dependence of the State on financial markets

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Interest rate increases on public debt often penalize countries whose public finances are deteriorating or whose policies displease economic forces. We can question the origins of this state dependency on financial markets. In France, after 1945 there was a “Treasury circuit” that provided state-controlled financing for reconstruction and then modernization. This system was progressively unraveled by measures that subordinated the conditions of public debt to the market. That system has been dismantled.