The global surge in interest rates has exposed…[France], once considered an oasis of relative stability in Europe\u2019s financial markets, as one of the continent\u2019s weakest links. France now pays more to borrow than former crisis hot spots like Greece and Italy. Its government is running a budget deficit surpassed only by the United States among its peers.\u00a0<\/p>\n\n\n\n
Last week, a slow-burning selloff in France\u2019s government bond market took an alarming turn<\/a> as it spread across the continent, reviving memories of the eurozone debt crisis last decade. France\u2019s 10-year borrowing cost has risen toward 5%, the highest level since 2002.<\/p>\n\n\n\n Investors are bracing for things to get worse. The rise in rates is saddling the government with higher costs just as it needs to refinance a mountain of debt borrowed during the era of ultralow interest rates. France has more than $1 trillion in debt coming due by 2030, and next year is set to sell a record of about $380 billion in debt into a market where once-reliable sources of demand have evaporated.<\/p>\n\n\n\n France\u2019s central bank is no longer buying government bonds and is instead letting its portfolio shrink as bonds mature. Once-steady investors like Japanese asset managers have also stepped back. Hedge funds that have stepped into the void have been burned<\/a> by the recent volatility.<\/p>\n\n\n\n \u201cFrance has been this free rider in Europe for years, if not decades. It has gotten away with fiscal murder,\u201d said Kevin Thozet, a portfolio adviser at the French asset manager Carmignac. \u201cIt worked as long as people were not noticing. Now people have started to notice.\u201d<\/p>\n\n\n\n Read it all<\/a>.<\/p> After years of overspending, France has emerged as one of Europe\u2019s weakest links. Investors are bracing for things to get worse. https:\/\/t.co\/MGG0wEfhzS<\/p>— The Wall Street Journal (@WSJ) October 6, 2026<\/a><\/blockquote>\n