France's borrowing costs surge amid debt and political risks

Summarised from 2 outlets · Updated 23 Oct, 12:15 · Archive

French government borrowing costs have risen sharply, with the spread between French and German bond yields reaching levels unseen since the early 2010s euro zone crisis.

France's borrowing costs have surged as investors worry about the country's mounting debt and political problems. The spread between French and German 10-year bond yields reached more than 170 basis points on Thursday, the highest since the early 2010s euro zone sovereign debt crisis. France's benchmark 10-year bond yield rose above 5% for the first time since 2002 this week, and the cost of insuring the French government against default is also at its highest level since that period. The euro has fallen almost 5% against the dollar since the start of the year.

Market stress in one euro zone country can spread rapidly through other economies sharing the currency but retaining separate fiscal systems, as the early 2010s crisis demonstrated. That crisis began in Greece before spreading to Portugal, Ireland, Italy and Spain. Economists are warning that similar fragmentation risks are emerging across major economies.

How it is being reported

• France awaits Moody's verdict: Downgrade widely expected as debt fears growFrance's cost of living protests come as the country struggles with its increasing public debt. Concerns over these public finances have pushed the nation's 10-year government bond yield above 5% for the first time since 2002—making borrowing costs higher. Oliver Davis, Professor and Head of the French Department at University College Cork, is our guest.France 24 · 23 Oct, 14:10
• France is flashing euro crisis signals. This time, the fault lines are differentFrench borrowing costs have surged as debt and political risks mount, raising questions over whether the stress could spread across the euro zone.CNBC · 23 Oct, 10:03

In this story: France · Germany · Greece · Portugal · Ireland · Italy · Spain · European Central Bank

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