France Faces a Debt Shock as Riots Send Borrowing Costs Soaring

France’s 10-year government borrowing yield rose to about 4.85% on Monday after weekend unrest, exceeding Italy’s roughly 4.52% and marking the largest increase among G7 countries. The protests over school conditions and living costs turned violent, and about 2,400 people were arrested. Investors’ measure of French risk—the gap between French and German 10-year yields—was near 145 basis points, or 1.45 percentage points, compared with about 85 in early September. France’s deficit is projected at 5.4% of GDP this year against the EU’s 3% limit, and Prime Minister Sébastien Lecornu needs about €54 billion in savings for 2027 without a parliamentary majority.