French Bond Yields Hit 24-Year High as Debt Risks Mount

French bond yields climbed from 5.002% on October 21 to a peak of 5.142% on October 22, their highest level since 2002, before easing to about 5.04% on October 23. The spread over German bonds widened from around 157 to 177 basis points, its broadest since 2011. The rise in French bond yields reflects investor concern over public finances and political uncertainty, rather than an imminent default or loss of market access. France’s public debt is about €3.6 trillion, or roughly 119% of GDP. The Treasury projects debt at 119.3% of GDP in 2026 and 121.7% in 2027, while this year’s budget deficit is expected to reach 5.4%, above the EU’s 3% reference limit. Parliamentary support for the 2027 budget, which includes €43 billion in new fiscal measures, remains uncertain. France plans around €340 billion in medium- and long-term bond issuance in 2027, and public-sector interest costs are forecast to rise from €79.2 billion this year to €91.2 billion next year. Higher borrowing costs could constrain government spending and feed through to mortgages and corporate finance. Business activity is also weakening: October’s preliminary composite PMI fell to 48.4 from 51.1. For crypto traders, the main relevance is indirect: sustained pressure on French and European markets could increase risk aversion and volatility across global assets, but the news provides no direct signal for any specific cryptocurrency.