France faces sovereign debt crisis as borrowing costs near 2008 highs

France’s 10-year government bond yield surged to 4.10% on August 18, marking the highest level since November 2008 when the global financial crisis was in full swing. The 2008 peak of 4.20% is now within striking distance. The 30-year yield told an even more uncomfortable story, reaching 4.90% on the same day. The numbers behind the squeeze France’s public debt stood at 117% of GDP as of July 2026. To put that in perspective, the Maastricht Treaty that underpins the eurozone set a target of 60%. France is nearly double that threshold. Treasury interest payments exceeded 6 billion euros in the first quarter of 2026, a 37% jump compared to the same period a year earlier. Rising oil prices, driven by persistent geopolitical tensions in the Middle East tied to Iran, have stoked inflation fears across global bond markets. While yields have climbed in other countries too, including Germany, France’s specific cocktail of high debt, political instability, and structural deficits makes its situation considerably more fragile. The spread between French OATs and German Bunds has been widening, and France’s borrowing costs are now comparable to those of eurozone countries traditionally viewed ...