France-Germany bond yield spread reaches highest level since 2012

The yield spread between 10-year French and German government bonds reached a level not seen since 2012. On Friday, September 18, 2026, the gap hit approximately 100 basis points, with French 10-year yields at 4.50% compared to 3.50% for the German Bund, which serves as the Eurozone benchmark.

This widening gap reflects growing investor skepticism regarding French public finances. The market tension follows Prime Minister Sébastien Lecornu’s presentation of a 2027 budget proposal aimed at achieving 54 billion euros in savings. Additionally, officials acknowledged that the goal of reducing the deficit to 5% of GDP would be delayed until the following year.

The rising cost of borrowing comes amid broader volatility in global bond markets, driven by concerns over debt levels and geopolitical tensions in the Middle East.