France faces political and economic instability ahead of elections

France is facing significant political and economic pressures ahead of its presidential elections. President Emmanuel Macron has warned of increasing Russian hybrid threats to Europe and maintained France's support for Ukraine, despite domestic social tensions caused by rising fuel prices and the economic consequences of international conflicts.

Economically, French sovereign bonds are experiencing record weakness. The spread between 10-year French OAT bonds and German Bunds has exceeded 100 basis points, a level not seen since 2012. This volatility is driven by both domestic political uncertainty and global factors. Analysts note that investors are increasingly viewing Italian and Spanish securities as alternatives to French debt, amid concerns over credit risk and upcoming rating revisions by agencies such as Moody's.