Brown Brothers Harriman says France’s 10-year yield gap with Germany has neared its estimated 2011 high, as official figures show the country’s debt ratio rose in Q2 2026.
In a note dated Oct. 22, Brown Brothers Harriman analyst Elias Haddad put the spread at 175 basis points. BBH said it had widened by more than 100 basis points since late February and estimated its 2011 peak at about 190 basis points.
Eurostat reported that France’s public debt was 119.1% of gross domestic product at the end of Q2 2026, up 1.4 percentage points from Q1. France’s Ministry of Economy said the 2027 draft finance bill was filed with the National Assembly on Oct. 1; an earlier EconoTimes report also covered France’s rising debt ratio.
France’s National Institute of Statistics and Economic Studies, known as Insee, said output was flat in Q2 after shrinking 0.2% in Q1. Its September outlook projected 0.4% growth for 2026. The European Commission’s May forecast projected that primary deficits and debt-service costs would push France’s debt ratio higher, with interest payments at 2.6% of GDP in 2026 and 2.8% in 2027.
The sentix Euro Break-up Index stood at 2.4% on Sept. 25, Sentix reported. The measure tracks investor sentiment about the prospect of a member leaving the currency union within a year; BBH compared the reading with about 13% during Italy’s 2018 crisis. BBH cited Italy’s October 2018 yield-spread peak of 340 basis points after an increase of about 200 basis points.
The European Central Bank’s Transmission Protection Instrument allows purchases of public-sector securities on secondary markets, with remaining maturities of one to 10 years, to address market strains that threaten monetary-policy transmission. The ECB considers factors including compliance with the EU fiscal framework, debt sustainability and whether purchases would be proportionate. BBH’s analysis said the instrument does not guarantee purchases or remove premiums tied to national fiscal conditions.
Insee is scheduled to publish its first estimate of Q3 2026 GDP on Oct. 30.
