France plans record bond sale as debt fears grow

The spread between French government bonds and their German equivalents widened after the news, reflecting what investors see as a rising risk premium. Economists voiced growing alarm over France’s fiscal path, pointing to surging debt and high bond yields ahead of next year’s divisive elections. Paris — already grappling with debt equivalent to 119% of GDP — said it would sell a record amount of bonds next year, prompting the spread between French government bonds and their German equivalents to widen, reflecting what investors see as a rising risk premium. The giant investment manager Vanguard warned that France was “degrading” its creditworthiness, while Commerzbank said in a note that “political uncertainty … is increasingly crippling the economy.” As a senior Bloomberg editor put it: “There are good reasons why France is now regarded as Europe’s ‘weakest link’.”