French government bond yields reach five percent for first time since 2002

The yield on France's benchmark ten year government bond crossed five percent on Wednesday, October 21. Euronews, CNBC, The Standard, The Edge Malaysia, and the Financial Times all reported that borrowing costs reached this level for the first time since 2002. TradingView and The Standard specified that it is the highest yield since July 2002. [1][2][5][6][7][8]

CNBC reported that the rise comes amid multiple domestic crises, including mass civil unrest and violent protests over the weekend regarding the high cost of living. Demonstrators clashed with police in Marseille on October 17. Euronews reported that French lawmakers are also wrangling over a 2027 budget that proposes billions of euros in spending cuts to manage national debt. [1][2]

France's national debt pile currently stands at around 120 percent of its gross domestic product, according to Euronews. This figure sits well above the European Union limit of 60 percent. Le Monde reported that the spread between the French ten year yield and the German ten year bond yield reached its highest point since 2012. [1][3]

As FTMQ News reported earlier, France's ten year government bond yield previously rose close to 4.9 percent following earlier weekend protests across Europe. The International Monetary Fund has warned that borrowing costs across the eurozone have reached two decade highs while treasuries plan record bond sales for 2027. [11][12]

Euronews noted that the French Treasury's OAT bond sets interest rates across the broader economy. As a result of the rising yield, borrowing costs could soon increase for French households and businesses. [1]