Pressure is mounting on France to move swiftly to approve its budget for 2027, as turmoil in the government bond market has driven the country’s borrowing costs close to their highest levels in the past 25 years.

At the same time, Eurozone finance ministers and the ECB appear reluctant to intervene to ease the pressure, making clear that restoring market confidence is primarily the responsibility of the French government.

At their monthly meeting in Luxembourg yesterday, Thursday, October 8, Eurozone finance ministers urged Paris to accelerate the process of passing the new budget in order to reduce uncertainty surrounding the fiscal trajectory of the European Union’s second-largest economy.

France is facing intense sell-offs in the government bond market, as its high fiscal deficit and political uncertainty ahead of the presidential election in spring 2027 are making investors increasingly cautious.

The yield on France’s 10-year government bond has risen by approximately 80 basis points since the beginning of September, approaching 5%, a level not seen since July 2002. This increase is placing an additional burden on public finances, as it raises the cost of servicing and refinancing the debt.

The Eurozone’s Message to Paris

Following the meeting, European Commission Executive Vice-President Valdis Dombrovskis, who is responsible for economic affairs, stressed the need for prudent fiscal policy, particularly among countries with high levels of deficits and public debt.

As he emphasized, it is extremely important for member states to maintain a responsible fiscal stance in order to ensure stability and market confidence.

Dombrovskis also said that he was in contact with French Minister Roland Lescure, stressing that credible budget planning is a key prerequisite for restoring predictability in economic policy.