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A continuing storyline covering the trajectory of France's fiscal position — deficits, public debt, and budget policy — and its persistent effects on French sovereign yields, the spread with German bunds, the euro, and broader eurozone debt market conditions.
France’s 10-year government bond yield crossed 5% on Wednesday for the first time since 2002 and rose to 5.089% in early Thursday trading, its highest level since July 2022, as investors sold French debt while the government struggled to pass a budget for next year. The rise lifted France’s 10-year borrowing cost above the equivalent for U.S. Treasury bonds for the first time since 2013, according to The Guardian.
France's 10-year borrowing cost has climbed toward 5%, the highest level since 2002, as a selloff in French government bonds spread across continental Europe last week. The country now pays more to borrow than former crisis hot spots like Greece and Italy, and its government is running a budget deficit surpassed only by the United States among its peers, according to The Wall Street Journal — a reversal for a nation once considered an oasis of relative stability in Europe's financial markets.
The Euro fell below $1.12 against the U.S. dollar on Monday, briefly dropping to $1.116 as investors weighed concerns about France's fiscal trajectory ahead of the 2027 presidential election and a snap election in Spain that could undermine the stability of the Eurozone. The currency remained down about 6.66% since the start of 2026, according to United Press International.
The yield on French 10-year government bonds climbed to its highest level since 2002 on October 1, 2026, as investors sold off French sovereign debt amid concerns over Paris's fiscal position. The move widened the gap between French and German 10-year borrowing costs to its largest level since 2012, a key measure of investor concern. The French government proposes spending cuts and tax increases as the country's public debt climbs to a record high, ahead of eurozone inflation data and the US September jobs report due October 2.