French borrowing costs rise as government prepares contentious 2027 budget
publishers 5articles 6first reported 24 Sep, 05:00 UTCdeveloping since 24 Sep · 3 editions
French borrowing costs have climbed as Prime Minister Sébastien Lecornu’s minority government prepares a 2027 budget that could trigger another parliamentary showdown.
The yield on France’s 10-year government bond rose above 4.5% on Friday for the first time since 2008 and was trading at 4.6696% on Thursday, CNBC reported. The yield was more than one percentage point above its German equivalent for the first time since the eurozone sovereign debt crisis in 2012, reflecting the higher premium investors are demanding to hold French debt.
Lecornu’s government plans to submit its draft budget to parliament in early October, with debate expected ahead of a Nov. 17 vote. He is targeting €54 billion ($61.8 billion) in spending cuts to reduce France’s deficit and slow the growth of public debt. The Finance Ministry expects debt to reach 119.3% of gross domestic product in 2026 and 121.7% in 2027, a record level.
Passing the package could prove difficult in a National Assembly divided among the far-right National Rally, the left-wing New Popular Front and Lecornu’s center-right bloc. Governments were removed in no-confidence votes in December 2024 and September 2025. Lecornu used a constitutional provision to pass the 2026 budget without a parliamentary vote in February.
Eurasia Group’s Mujtaba Rahman said proposed measures such as a partial pension freeze would face opposition. He said Lecornu may seek compromises or again use constitutional powers to meet the mid-December budget deadline.
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