France becomes the poster child for debt troubles in developed economies
According to the WSJ, French 10-year yields hit a 24-year high, and the columnist argues that France's debt is unsustainable under current policy.
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what happened
Wall Street Journal columnist James Mackintosh writes that France has become the biggest casualty of soaring global bond yields. Investors who bought French debt for its higher yield started to exit, adding pressure on French bonds. The IMF expects French net debt to exceed 111% of GDP this year, with the budget deficit around 5% of GDP.
Mackintosh says the core problem is political: voters back neither higher taxes nor spending cuts. The 10-year yield briefly passed 5%, and its spread over German bunds reached about 1.5 percentage points, the highest since 2012. He still sees France as far from crisis and expects the ECB to step in before markets panic.
why it matters
For markets, the key risk is the next presidential election and whether the winner loosens fiscal discipline. A widening spread to Germany and pressure on the euro matter for European bonds, equities and EUR/USD.
market impact
French government bonds and the OAT-Bund spread: pressure from rising deficit and debt; euro exposed to political risk.
tags
instruments
sources
- How France Became the Poster Child for Debt Woes - Streetwise — WSJ, 25 October 2026 at 09:30 UTC
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