Protestsupdated 56m ago2 min read
France’s Debt Snowball Effect Overwhelms Macron as Curfews Follow Student Protests
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France's bond yields rose to the highest in nearly 25 years amid unrest. Curfews spread in major cities as protests intensified nationwide.
Protests and curfews
France’s unrest began with a student protest against the deterioration of conditions in public schools and expanded into a broader movement that “yells about the cost of living” and “the amount of pensions.” President Emmanuel Macron’s government was overwhelmed, and curfews were imposed in some of France’s major cities to end “the looting and vandalism that had taken hold since last weekend.” The crisis culminated in the “largest demonstrations of violence seen in a long time,” linking it to “spiraling debt, weak growth, and cuts in the public system.”
Acento said the protests were fueled by economic pressures, while it also warned that a “debt’s ‘snowball effect’” could further reduce Macron’s room for maneuver. El País added that “the Government has little room to maneuver” as it tried to respond to social demands.
Markets and political blockage
France’s risk premium rose substantially since early September 2026, reflecting “growing doubts about the sustainability of the Gaul debt.” Finance Minister Roland Lescure told the National Assembly on Monday that France is not trapped in a debt “snowball.” Yields on French bonds rose to their highest levels in nearly a quarter of a century as investors demanded higher returns, and the surge was linked to “the paralysis of the country’s political system.”
French Prime Minister Ssbastien Lecornu was mired in a legislative battle to pass a budget for next year that includes 54 billion euros ($61bn) in savings. The Ministry of Economy and Finance admitted it has reduced the sale of bonds beyond 30 years due to lower investor demand.
What is at stake
France’s borrowing costs were “swallowing up a growing share of tax revenues” that could otherwise be directed towards essential services such as education and healthcare. France’s 10-year bond yield had risen more than 130 basis points since June, topping 4.9 percent, and the political and budgetary fight was described as a driver of market worry. Macron’s government was trying to pass budget measures to reduce the public deficit, but it faced rejection from a Parliament in which it is in the minority and from protesters who demand better public services and oppose cuts to the French welfare state.
The crisis threatens to worsen the problem because “the Government has little room to maneuver,” framing the political constraints as a barrier to economic concessions. Macron’s government was trying to pass budget measures to reduce the public deficit, but it faced rejection from a Parliament in which it is in the minority and from protesters who demand better public services and oppose cuts to the French welfare state.