France’s 10‑year bond yield rises above 5% for first time since 2002

The yield on France’s benchmark 10‑year government bond briefly crossed the 5% threshold for the first time since 2002, according to CNBC. The yield was last seen around 4.9794% before rising above 5% shortly before 11:30 a.m. in Paris, according to CNBC.

The spread between French and German 10‑year bonds surged to nearly 160 basis points on Wednesday, according to Le Monde.

France is negotiating its 2027 fiscal budget, and the government has indicated it may use Article 49.3 of the constitution to force the budget through if necessary, according to CNBC. Prime Minister Sebastien Lecornu said he will target 54 billion euros in spending cuts, according to CNBC.

Mass civil unrest has escalated over the weekend, with violent protests and rioting reported across Paris, according to CNBC. The unrest began as a student movement and has grown into widespread demonstrations, according to CNBC.

Financial markets have been piling pressure on France to fix its finances, with investors concerned that a politically fractured parliament will struggle to agree on the spending cuts required to bring down the country’s ballooning deficit and national debt, according to CNBC. The EU’s excessive deficit procedure recommends a deficit closer to 3% of GDP, according to CNBC.