France’s 10-year government bond yield reached a Reuters-reported intraday high of 5.1415% on Oct. 22, adding to pressure on a government seeking parliamentary approval for a 2027 deficit-reduction plan.
Reuters said the yield had not been that high since July 2002. In a report published at 7:06 a.m. ET, the news agency put the yield at 5.06%, up 6.5 basis points. Reuters linked investor concern to France’s strained public finances and the government’s ability to pass its budget.
The government’s plan sets a public-deficit target of 5% of gross domestic product in 2027, compared with a revised 5.4% estimate for 2026. It says the 2027 finance and social-security bills include €43 billion in new adjustment measures, taking the total fiscal effort to €54 billion when earlier measures are counted. Agence France Trésor forecasts state debt service of €72.9 billion in 2027.
France’s political tensions are another backdrop to the budget debate. French President Emmanuel Macron said he saw no visible foreign interference in the unrest itself, while alleging that foreign information manipulation followed. Reuters’ English translation of the Élysée transcript renders Macron’s description of foreign leaders’ comments as “unacceptable” and “stupid.” Asked whether he meant U.S. President Donald Trump, Macron replied, “Among others.”
The Associated Press said student demonstrations first focused on school resources before taking up cost-of-living concerns. Student union UNEF and Yellow Vest groups called for rallies Saturday, Oct. 24, Reuters reported. The Associated Press said CGT union activists were also expected to join.
Morningstar DBRS expects insured losses from the latest riots to stay below €1.2 billion if there are no further widespread riots. The firm says French direct insurers would initially bear most insured claims, with reinsurers and potentially the state sharing losses later. For comparison, Morningstar DBRS says France’s 2023 riots caused €730 million in insured losses across about 15,600 claims.
The Finance Ministry’s schedule gives Parliament 70 days to review the budget, propose changes and vote. The ministry says the finance law is due to be promulgated by Dec. 31.
