La prima de riesgo de Francia sobre España bate su récord histórico

French government bonds have reached a historic high, with Goldman Sachs estimating a 68% probability that Marine Le Pen will become the next French president. The global market tension has predominantly affected France due to the rising cost of its 10-year public debt, which surged by over 60 basis points in the summer, reaching 4.23% - the highest level since 2008.

While investors demand higher returns on debt for most countries due to inflationary pressures from rising oil prices following the Iran war, France is facing a more severe penalty. In just three months, Spanish debt costs increased by a milder 0.82%, while the French debt differential against Spain has hit an historical high of more than 40 basis points.

Analysts cite complicated fiscal numbers - primary deficit, rising interest costs, and debt-to-GDP ratios - along with a fragmented political landscape in France, to explain market concerns. The upcoming presidential elections next year further increase uncertainty. Prime Minister Édouard Philippe's plans to reduce the deficit to 5.3% of GDP by 2026 and 2027 will remain unachieved, with both years set to witness a deficit of similar magnitude.

The extreme right-wing leader's lax fiscal policies aimed at reviving the economy and rewarding her supporters could complicate European integration efforts. As a result, analysts at Barclays warn that France's debt risk premium over Germany's could surpass 100 basis points in the first half of 2027 if elections lead to a final run-off between two non-centrist candidates.

This scenario would impose a premium of around 60 basis points on Spain, which, despite holding elections next year, does not currently trouble investors. During the electoral period, French bonds might experience a buyer's strike as issuances rise, until the market can discern through the cloud of uncertainty. Like Spain and Italy, France's future integration prospects could be jeopardized by a retreat in European union integration.