France's 10-Year Bond Yield Nears 5% as 115.6% Debt and Election Turmoil Rattle Markets
Updated
Updated · The Guardian · Oct 10
France's 10-Year Bond Yield Nears 5% as 115.6% Debt and Election Turmoil Rattle Markets
3 articles · Updated · The Guardian · Oct 10
Summary
French 10-year yields climbed to their highest since July 2002, stopping just short of 5% as investors lost confidence in Paris's ability to rein in spending.
Debt at 115.6% of GDP and a deficit still above 5% have sharpened fears that France lacks a credible path to fiscal repair, even as growth stays weak and pension reform has stalled.
Political risk is amplifying the selloff: investors are increasingly focused on a possible Le Pen-Melenchon runoff next April, with some analysts warning that euro-exit risk is again being priced.
Business sentiment is already deteriorating, with 82% of firms pessimistic about the next government's economic policy and 66% saying prolonged deadlock could leave them vulnerable or bankrupt.
The stress now reaches beyond France because any ECB backstop would likely come with conditions, while a deeper French crisis could reignite eurozone-wide debt fears for a country some economists call 'too big to save'.