French–German bond spread widest since euro debt crisis as Paris fiscal worries mount
On 2 October the gap between French and German 10-year yields pushed past roughly 140–150 basis points, its widest since the 2011–12 eurozone debt crisis, as investors priced in France-specific fiscal risk around the 2027 budget, Reuters and market reports said.
The spread between French 10-year OATs and German Bunds widened further on Friday, 2 October, to levels not seen since the eurozone debt crisis more than a decade ago, as markets separated France’s borrowing costs from Germany’s, Reuters reported from London.
Spread at multi-year extremes
Reuters said the French 10-year yield was little changed near 4.94% while the German 10-year yield fell about 10 basis points, pushing the Franco-German gap to over 150 basis points — the widest since around 2011. ActionForex cited the spread past about 140.6 bp after Reuters had already recorded roughly 133 bp on 1 October, both readings the widest since 2012. Yields move inversely with prices; the divergence — French yields firm while Bunds rallied — points to a France-specific risk premium rather than a uniform euro-area rates move.
Budget backdrop and euro pressure
Prime Minister Sébastien Lecornu’s government has framed a 2027 package targeting around €54 billion of savings to trim the deficit from about 5.4% of GDP in 2026 toward 5% the following year, but the plan faces a difficult path through a divided parliament. Economists warned that a prolonged widening could harden into a bond-market crisis narrative. The euro traded near $1.12, after touching multi-month lows against the dollar as safe-haven flows favoured Bunds, the Swiss franc and US Treasuries ahead of US jobs data.
Also available in: Саха тылаРусскийEspañol中文Portuguêsالعربية