The spread between French 10-year government bonds and German equivalents reached 101–104 basis points on September 18, 2026. This marks the widest gap since the 2012 eurozone debt crisis, reflecting investor concerns over France's fiscal stability.
France's budget deficit is expected to reach 5.4% of GDP in 2026, exceeding the EU limit of 3%. The national debt-to-GDP ratio is currently between 117.5% and 118%, with annual interest payments projected to surpass €65 billion.
Yields on 10-year French bonds are nearing 4.5%, a level not observed since 2008. Earlier in 2026, the spread was approximately 60 basis points, while it stood at roughly 50 basis points before the 2024 parliamentary elections.
The government has announced plans for €54 billion in spending cuts for 2027, aiming to reduce the deficit to about 5% of GDP. Meanwhile, five-year credit default swaps on French debt have climbed to 41.5 basis points.
Société Générale analysts suggest the spread could potentially widen to 120 basis points if fiscal conditions worsen. Political uncertainty ahead of the 2027 presidential elections further contributes to market volatility.
