The yield on French bonds has reached 4.96%, its highest level since 2002. Investors are selling Parisian debt due to the country's difficulty in approving its 2027 budget.
According to El Periódico, the yields on French bonds have reached 4.96%, their highest level since 2002. The rise revives fears of a debt crisis in the eurozone similar to that of 2010.
The public debt of France amounts to 119% of GDP, according to Insee, the country's national statistics institute. Eurozone finance ministers met last Thursday in Luxembourg to address the unrest in the debt markets and the French situation.
Interest rates are increasing the budgetary burden on the French state. According to the French Senate, the country allocated 51.6 billion euros for interest payments in 2025, a 3% increase from 2024. In the case of Spain, the Bank of Spain estimates the interest expenditure for 2025 at 34.9 billion euros.
Investors have sold French debt in recent days. This makes these securities more profitable in the short term, but also riskier, as the financing cost for the government of Emmanuel Macron hits a decade-high.
The International Monetary Fund (IMF) predicts that global public debt will exceed 100% of global GDP and calls for urgent measures. The Washington-based entity warns of the impact of rising yields on the global financial system.
“The increase in financing costs exacerbates fiscal pressures at a time of high debt, making credible consolidation even more urgent.”
Very high interest rates can lead to unsustainable debts. If this occurs, even investors who lent money to the state could suffer losses, because the higher the yield, the greater the risk of default.
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