French debt premium hits 15-year high on budget and protest worries
The French 10-year spread over Bunds widened to 160.9 bps, its widest since 2011, as fiscal strains and street protests weigh on sentiment.
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what happened
According to Reuters, the spread between French 10-year government bonds and German Bunds widened to 160.9 basis points, the highest since November 2011 during the euro zone debt crisis. The French 10-year yield rose 6 bps to 5.0601%, its highest level since July 2002.
Investors are concerned about Paris's ability to repair strained public finances, while ongoing street protests and difficulties passing a budget add to the uncertainty. Ministers have promised a heavily reinforced security operation for planned protests this Saturday, and political risk ahead of next year's election keeps sentiment cautious. Spreads also widened in Belgium, Italy, Spain and Greece, with Belgium's reaching 104.89 bps, its highest since 2013.
why it matters
Wider spreads also reflect expectations of a more hawkish ECB: higher energy prices have pushed markets to price around three further hikes by year-end, which puts pressure on highly indebted countries. Citi economist Giada Giani said Europe is better equipped for crises than 15 years ago, but rising euroscepticism remains a constraint.
market impact
Eurozone bonds: pressure on French and peripheral debt as spreads over Bunds widen
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sources
- French debt premium hits new 15-year high on fiscal, unrest concerns — Reuters, 22 October 2026 at 07:47 UTC
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