France hit by debt sell-off as protests unnerve investors
Summary
France experienced a drop in its government bonds and stock markets after violent protests caused damage and many arrests. Investors are worried about the country's rising borrowing costs and political risks as France prepares its budget amid social unrest.Key Facts
- Violent protests in France led to burned buildings, looted shops, and nearly 2,400 arrests.
- Police used teargas during clashes with protesters across multiple cities.
- The French government bond yields increased, signaling higher borrowing costs for France.
- The gap between French and German 10-year bond yields widened, showing increased risk for French debt.
- Protests began as peaceful marches over school conditions and cost of living but turned violent in some places.
- France's debt-to-GDP ratio was 115.6% in 2025, higher than the UK’s 94.3%.
- The French government aims to cut pension spending and government funding (except defense) to reduce its deficit.
- The French stock index (CAC 40) dropped by 1%, and the euro weakened slightly against the US dollar.
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