France and Belgium are slowly heading towards an unsustainable debt burden, Desmond Lawrence, senior investment strategist at the US asset manager State Street Investment Management, warned on Wednesday.
Speaking during a panel discussion at the Fixed Income Leaders Summit in Antibes (France), Lawrence said the risk was building gradually rather than suddenly.
He compared the situation to the "boiling frog situation": a frog in a pan of water that does not notice the rising temperature until it is too late.
According to Lawrence, governments continue issuing debt and the market keeps absorbing it, but there comes a point at which the burden is no longer sustainable.
He said that moment is approaching slowly, warning that debt can appear manageable for a long time before reaching a critical level.
