France Bond Spread Widen to 100 Basis Points Amid Fiscal Concerns

France's bond market delivered a negative verdict on its finances as the premium it pays to borrow over Germany crossed 100 basis points for the first time since the eurozone debt crisis of 2011-12. This marks a symbolic shift, with France moving away from the currency union's northern core and closer to its traditionally more vulnerable periphery.

The move came as France's finance ministry released updated debt projections, showing public debt reaching 119.3% of GDP in 2026, up from 115.7% in 2025 and below 100% in 2019. The ministry expects the ratio to rise to 121.7% in 2027.

France's budget deficit stands at 5.4% of GDP, nearly twice the European Union's 3% ceiling. Finance Minister Roland Lescure acknowledged the spread's widening but framed it as manageable, saying 'There has been a bit of a rise in the spread, as you said, between France and Germany. This is mostly linked with the fact that we have budgetary issues. We are tackling them.'

The market's read was less reassuring, with French 10-year yields trading near 4.48% against a German Bund yield of roughly 3.50%. Analysts at Amundi noted the spread had been around 55 basis points at the start of 2026, meaning the gap between Paris and Berlin nearly doubled in less than a year.