French Borrowing Costs Stay Near 24-Year Highs

France’s borrowing costs remained near their highest levels in more than two decades on October 19, as investors weighed the country’s large deficit and uncertainty over whether its government can pass a budget. The pressure has raised concerns about the French economy and possible spillovers to other eurozone markets, but a wider debt crisis has not occurred. The yield on France’s 10-year government bonds rose to 4.857% intraday, while the comparable German yield reached 3.425%, according to market data. The spread between French and German 10-year yields was reported at about 145 to 147 basis points. The euro fell 0.3% to $1.1203 in the same trading snapshot. France’s government forecasts a budget deficit of 5.4% of gross domestic product in 2026. Its draft budget aims to reduce that to 5% in 2027. Prime Minister Sébastien Lecornu is seeking 54 billion euros in savings, but the government faces a divided National Assembly and difficulty securing support for its fiscal plans. France’s public debt was about 119% of GDP, or roughly 3.6 trillion euros, according to the latest figures cited in the reporting. Rising yields increase the cost of new borrowing and, as debt is...