France debt crisis: Could turmoil spread across the euro zone?– www.cnbc.com
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Protesters gather for a student demonstration at Place de la Bastille with a view of the Colonne de Juillet monument in Paris, on October 8, 2026, as part of a nationwide protest movement over learning conditions.
Simon Wohlfahrt | Afp | Getty Images
As France’s economic and political woes mount, investors are asking whether the country’s debt problems risk contaminating the rest of the euro zone.
Markets are flashing alarm bells over the euro zone’s second-biggest economy. The euro has remained under pressure, falling almost 5% against the dollar since the start of the year.
France’s benchmark borrowing cost, the yield on its 10-year bond, rose above 5% for the first time since 2002 this week before moving sharply higher.
Meanwhile, the spread between French and German 10-year bond yields — a closely watched metric of distress — reached more than 170 basis points on Thursday for the first time since the euro zone debt crisis of the early 2010s. The cost of insuring the French government against default, as measured by credit default swaps, is also the highest since that period.
