French Bond Yields at 2002 High as Fiscal and Political Risks Grow
France’s 10-year OAT yield climbed to 4.92%, its highest level since July 2002, as a broader global bond selloff intensified concerns over the country’s fiscal and political outlook. The yield spread over equivalent German Bunds widened to 152 basis points, the largest premium since 2011, reflecting growing investor concern about France’s rising debt burden and limited progress on deficit reduction. The government aims to bring the budget deficit down to 5%, but deteriorating public finances have made that target increasingly difficult to achieve. A new budget unveiled ambitious spending cuts, although securing parliamentary support could prove challenging after repeated political instability. France’s debt-to-GDP ratio is approaching 120%, while borrowing costs have risen sharply, increasing pressure on public finances. Attention is also turning to next year’s presidential election. Elsewhere, Spanish PM Pedro Sánchez called a snap election after Congress rejected housing measures.
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92%, its highest level since July 2002, as a broader global bond selloff intensified concerns over the country’s fiscal and political outlook. The yield spread over equivalent German Bunds widened to 152 basis points, the largest premium since 2011, reflecting growing investor concern about France’s rising debt burden and limited progress on deficit reduction. The government aims to bring the budget deficit down to 5%, but deteriorating public finances have made that target increasingly difficult to achieve. A new budget unveiled ambitious spending cuts, although securing parliamentary support could prove challenging after repeated political instability.
France’s debt-to-GDP ratio is approaching 120%, while borrowing costs have risen sharply, increasing pressure on public finances. Attention is also turning to next year’s presidential election. Elsewhere, Spanish PM Pedro Sánchez called a snap election after Congress rejected housing measures.