UBS CEO Ermotti Warns France Debt Crisis Needs "Hard Measures" as OAT-Bund Spread Hits 140 Basis Points

UBS CEO Sergio Ermotti warned Tuesday that resolving France's debt crisis will require "hard measures," saying "incremental small changes are not going to be enough to resolve the big debt pile." Speaking to CNBC, Ermotti cited eurozone crisis-era overhauls in Spain, Italy, Greece and Portugal, now among Europe's best performers, as evidence that austerity-style pain can pay off. French 10-year OAT yields stood at 4.7689% on Tuesday after pulling back 9 basis points, leaving France paying more to borrow than Greece or Italy. The OAT-Bund spread closed last week at 140 basis points, up 34 basis points in the steepest weekly move in 17 years. The euro fell to a 17-month low Monday. Federated Hermes's Mitch Reznick said French debt is increasingly priced "less like core Europe and more like the periphery." Candriam's Nicolas Forest warned the market is nearing eurozone-crisis stress levels, with the deficit potentially approaching 6% of GDP. Far-right candidate Marine Le Pen called for sweeping spending cuts, warning of possible sovereign default.