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French yields and euro spreads hit crisis-era levels, CNBC reports
CNBC reports France's 10-year yield rose above 5% and the spread over German debt topped 170 basis points, prompting questions about euro-zone spillover.
CNBC reported on Friday that French government borrowing costs and the gap versus German debt have reached levels associated with the euro-zone sovereign-debt crisis of the early 2010s, as investors reassess France's fiscal outlook1.
The outlet said France's 10-year bond yield rose above 5% this week for the first time since 2002, then moved sharply higher1. The spread between French and German 10-year yields reached more than 170 basis points on Thursday, the first time since that earlier crisis, CNBC said, and the cost of French sovereign credit-default swaps was the highest since then1.
CNBC said the euro has fallen almost 5% against the dollar since the start of the year1. It described concern about fragmentation, in which countries that share a currency face sharply different borrowing costs1. France's high debt and deficit, weak growth and political instability have fueled questions about its ability to control public finances, according to the report1.
The piece recalled that the 2010s crisis spread from Greece to other euro members and eased after rescue programs and a 2012 European Central Bank pledge to preserve the euro1. CNBC said analysts argue stronger banks and euro-area safeguards make a repeat less likely, while further volatility and spillovers remain possible1. Economists cited in the report also warned of a cycle in which higher yields raise interest costs and add to debt burdens in large economies including France1.
