French parliament will need ‘serious’ budget talks given bond market tensions
The yields on French 10-year government bonds reached their highest level since 2008 last week, going above 4.13%.
The French government finds itself bracing for potentially contentious budget negotiations in parliament, as soaring borrowing costs from bond markets pose a challenge. Government spokeswoman Maud Bregeon warned on Monday that serious talks would be necessary to manage the country's finances, emphasizing the need to curb the deficit without causing undue hardship for ordinary citizens.
She stressed that the government aims to improve public finances and trim the deficit without resorting to tax hikes. French 10-year government bond yields surged to their highest level since 2008, breaching the 4.13% mark last week, signaling market concerns. The situation has prompted the government to pledge its commitment to maintaining a budget deficit close to 5% by 2027, a timeline that polls predict could see the far-right party gain momentum.
Finance Minister Roland Lescure echoed these sentiments, vowing to keep the deficit as close to 5% as possible. The European Commission has forecast a 2026 French budget deficit of 5.1%, a figure that would contravene EU guidelines limiting deficits to 3% of GDP.
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- French parliament will need ‘serious’ budget talks given bond market tensions freemalaysiatoday.com
