The supermarket fridge cyberattack, a wake-up call for all industries and a reminder of European law for France

Higher borrowing costs have raised alarm bells for France's financial future, despite the government's continued confidence among investors, according to Finance Minister Roland Lescure. Lescure told Franceinfo radio that while Paris has no trouble issuing debt, the increased costs are a signal that needs to be addressed. The country's 10-year government bond yield has risen to near five percent, reflecting the additional risk investors perceive.

EU Economy Commissioner Valdis Dombrovskis emphasized the importance of clarity around France's budget during the IMF-World Bank annual meetings in Bangkok. IMF Chief Kristalina Georgieva warned that it would take time for France's debt levels to return to a level of "full confidence" among investors. Under the government's proposed budget, public debt is expected to reach a record 121.7 percent of GDP by 2027, up from 119 percent at the end of June.

The budget also aims to reduce the deficit to 5 percent of GDP next year from an estimated 5.4 percent in 2026. However, the budget's passage through parliament is facing challenges due to the lack of a majority in the lower house. The situation is further complicated by France's upcoming presidential election, with incumbent President Emmanuel Macron barred from seeking a second term.

Opposition candidate Marine Le Pen, in an interview with The Financial Times, acknowledged the "gigantic, enormous debt" and proposed cost-saving measures that could include slashing France's contribution to the EU budget. Bank of France Governor Emmanuel Moulin called on French political leaders to "shoulder their responsibilities" to secure budget adoption, referencing a constitutional provision that allows governments to pass legislation without a vote.