France's 10-Year Yield Hits 5% as Debt Premium Over Germany Widens to 152 Basis Points
Updated
Updated · Euronews · Oct 6
France's 10-Year Yield Hits 5% as Debt Premium Over Germany Widens to 152 Basis Points
3 articles · Updated · Euronews · Oct 6
Summary
France’s 10-year borrowing cost climbed to 5% last week—the highest since 2002—while its spread over Germany hit 152 basis points, a level last seen during the 2011-12 eurozone debt crisis.
€3.6 trillion of public debt, equal to 119% of GDP, is driving the selloff as France runs a 5.4% deficit this year, far above the EU’s 3% limit, and investors doubt Paris can deliver credible cuts.
Sébastien Lecornu’s minority government proposed €54 billion of 2027 savings and revenue measures, but markets focused on repeated missed targets, a 13 October budget fight and a 2027 presidential election.
€340 billion of planned 2027 debt issuance adds pressure, and BNP Paribas estimates debt could still rise to 121% of GDP next year, or 126% by 2032 if serious deficit cuts slip to 2028.
The turmoil is already spilling into Europe: Italian and Greek spreads have widened, the euro touched $1.1161, and the ECB faces pressure between fighting 3.8% inflation and containing bond-market stress.