France's 10‑Year Government Bond Yield Hits Record 3.89%

On 8 July 2026 the yield on France’s 10‑year OAT rose to 3.89%, the highest level since June 2009. The spread over the German Bund widened to more than 80 basis points, surpassing Italy’s level and marking the widest gap in the euro area for the year.

The jump is attributed to three linked factors: a public‑debt ratio of 117.5% of GDP, a budget deficit that is expected to miss the 5% target, and heightened risk perception after the Paris court confirmed Marine Le Pen’s conviction and her candidacy for the 2027 presidential election. Internationally, renewed hostilities in the Middle East following former U.S. President Donald Trump’s statement that the Iran cease‑fire was “ended” have pushed oil prices higher, adding inflationary pressure.

Analysts warn that the higher borrowing cost will increase France’s annual interest bill by hundreds of millions of euros, limit fiscal space, and could be passed on to households through more expensive mortgage and corporate loans. Alexandre Stott of Goldman Sachs cautioned, “If France does not reduce its deficit even marginally, it would send a bad signal to investors.”