France's borrowing costs exceeded those of traditional European debt laggard Italy on Tuesday, September 10, reflecting investor worries over the country's finances and political stability after Prime Minister François Bayrou's ouster. The yield on 10-year French bonds rose to 3.48%, compared to 3.47% for Italian bonds – a situation unseen in years.
The Paris stock market, however, was up in morning trading as traders had anticipated that Bayrou would lose Monday's confidence vote in parliament that toppled this government after nine months in power. Bayrou had blindsided even his allies by calling the vote to end a lengthy standoff over his austerity budget, which foresaw almost €44 billion of cost savings to reduce France's debt pile.
France's debt has reached €3.3 trillion, or 114% of its gross domestic product. President Emmanuel Macron will now have to find a new prime minister. Bayrou was the sixth prime minister under Macron since his 2017 election and the fifth since 2022.