France's Sovereign Debt Crisis Intensifies as Borrowing Costs Hit Near-2008 Levels
French government bond yields have surged to near post-financial-crisis levels, reflecting growing concerns over the country’s fiscal and political instability. The benchmark 10-year French government bond yield reached a peak of above 4.13% in July 2026 — its highest since 2008 — as investors price in risks from an upcoming budget battle and presidential election. France has repeatedly violated EU deficit rules, with the IMF projecting that gross government debt will exceed 120% of GDP by 2027. The country's economic performance remains weak, having contracted slightly in Q1 2026 and stagnated in Q2. Political instability is compounding these issues, as a fractured National Assembly leads to frequent no-confidence votes and stalled budget negotiations. The situation has drawn international attention, with analysts like John Stopford of Ninety One noting that France serves as a 'poster child' for global sovereign debt challenges.
Topics: bond yields european union fiscal policy political instability