France is facing the risk of a debt crisis as its 10-year bond yield surged above 4.13%, the highest since the 2008 financial crisis, amid public debt exceeding 115% of GDP and an upcoming 2027 budget battle. CNBC reported that the deteriorating fiscal position and political gridlock are raising concerns in the bond market. France, the EU's second-largest economy, has repeatedly breached the European Commission's deficit and debt framework, with a deficit of 5.1% of GDP last year. The IMF forecasts debt will rise to 118.5% of GDP in 2026 and exceed 120% in 2027. The French government will submit its 2027 budget plan to parliament by early October, amid political divisions and the 2027 presidential election, where Marine Le Pen is seen as a frontrunner. Analysts point to France as an example of public debt problems and warn of a bond market revolt if there is no serious fiscal adjustment. The market is watching late this year to early 2027 as a period of high volatility.
10-year bond yield hits highest since 2008, indicating rising borrowing costs and debt crisis risk.
