Finance05 October, 20262 min read
BNP Paribas Economist Stephane Colliac Says France’s Debt Crisis Isn’t A Crisis
This article is an automated aggregation of coverage from news outlets. Our editorials offer in-depth analysis curated by the NewsCord team.
France's borrowing costs reached multi-year highs amid rising debt concerns. Analysts disagree whether France faces a full debt crisis versus ongoing risks.
Yields surge, gridlock persists
France’s borrowing costs surged as investors demanded higher returns for French government bonds, with the French 10-year bond yield standing at 4.7689% on Tuesday afternoon after easing 9 basis points. BNP Paribas economist Stephane Colliac said, “The short answer is no, this is not a debt crisis,” while noting France’s effective interest rate was slightly above 2 per cent. Sergio Ermotti told CNBC that “hard measures” are needed to tackle France’s spiraling debt crisis, warning that “small, incremental changes” would not be enough.
Euronews said French borrowing costs hit their highest level since 2002, and it reported that investors demanded up to 5% a year to lend to the French government for 10 years. Euronews also reported that France’s public debt reached €3.6 trillion in the second quarter of 2026, equal to 119% of GDP, up from 115.6% a year earlier.
Protests and policy pressure
France’s student protests highlighted financial pressures as public debt was reported as more than $4 trillion in June, exceeding the size of the economy. Andrew Kenningham, chief European economist at consultancy Capital Economics, said bond buyers were concerned that fiscal measures could be watered down by lawmakers ahead of presidential elections next year. CNN reported that the spread between French and German bond yields expanded to its widest level since 2012, as investors demanded much higher returns to hold debt from France compared with Germany.
Euronews said Prime Minister Sébastien Lecornu presented its 2027 draft budget on last Thursday, proposing about €54 billion in spending savings and additional revenue. Euronews added that the National Assembly starts debating the text on 13 October, with a presidential election due in spring 2027.
What markets fear next
Analysts at BNP Paribas and other market participants warned that political dysfunction and fiscal uncertainty could keep spreads elevated, with Stephane Colliac arguing that France was not in a debt crisis while cautioning about future uncertainties. Euronews said France’s premium over Germany’s equivalent Bund reached 152 basis points, or 1.52 percentage points, returning to levels associated with the 2011 eurozone crisis. POLITICO.eu reported that Bank of France Governor Emmanuel Moulin warned “everything must be done” to avert a debt crisis ahead of the 2027 presidential election.
Euronews said France’s Treasury plans to issue €340 billion of debt in 2027, €20 billion more than this year, as pandemic-era borrowing comes due. Euronews concluded that even if everything goes to plan, it expected debt to rise to 121% of GDP in 2027 and to stabilise only at 124% in 2032.