France is facing growing concerns over its public debt after government borrowing costs climbed to their highest level since 2002.
The yield on France's 10-year government bonds has risen sharply, reaching around 4.95% on the secondary market, according to reports. The increase has pushed French borrowing costs significantly higher than they were earlier this year.
The gap between French and German 10-year borrowing costs has also widened considerably. The spread between France's OAT bonds and Germany's benchmark Bund has reached levels not seen since the European debt crisis of 2011–12, according to market reporting.
Higher borrowing costs create additional pressure on France's public finances because the government has to pay more when it refinances existing debt and raises new funds.
The situation comes as investors remain focused on France's large budget deficit and its plans for managing public spending and debt.
Financial markets are also being affected by broader changes in global interest rates and energy prices. Rising borrowing costs in several major economies have increased pressure on governments that already carry high levels of debt.
For French households and businesses, prolonged pressure on government finances could also become an important economic issue if higher borrowing costs eventually affect taxation, public spending or wider economic conditions.
The latest market movements have therefore put France's debt position back into focus as investors assess whether the country's public finances can remain sustainable while borrowing costs stay elevated.