PARIS (The Blaze/AP) --France's government sold €6 billlion in short-term bonds at negative interest rates Monday, as investors flock to the perceived safety of Europe's larger economies.
In a sale Monday, the treasury sold three-month bonds at -0.005 percent, and six-month bonds at -0.006 percent. The treasury agency says it's the first time they have registered negative yields.
So what does this mean?
It means that investors "effectively paid France on Monday to park their money in the relative safety of the government's short-term debt," Reuters reports, which means that this is the first time France has been able to raise cash for less than it'll have to repay.
Considering France's massive debt burden, this development is somewhat surprising. In fact, France's economic outlook is stagnant, according to French President Francois Hollande.
"Everybody knows that in the first half of the year, growth will be nil," French President Francois Hollande said Monday at a jobs conference.
Still, despite its debt and economic projections, "France has been borrowing recently at historically low cost," Reuters reports. Yields, or borrowing rates, have been falling on French medium and long-term bonds in auctions over the past couple of months.
"Investors are rating it as a relatively safe option compared with euro alternatives such as Italy, one of the world's biggest sovereign debtors, or Spain, which has had to seek a bailout for banks left crippled by a property crash four years ago," the report adds.
Francois Hollande Sunday July 8, 2012. (AP)
Speaking to union and employer groups on Monday, Hollande outlined what he thinks are the three biggest problems facing France: public finances, lack of competitiveness, and dealing with rising unemployment.
"[W]e need to mobilize all our forces, all our imagination, all our capacities to achieve lasting growth for the years ahead," he said. "My goal is to make our social model evolve to better guarantee. The time has come to put France on the move, and there is no time to lose."
"This is not a choice for an assault of austerity but the choice for the future sovereignty of our country," he added, referring to his administration's efforts to tackle France's growing debt.
The Associated Press contributed to this report.