France's Borrowing Costs Rise Above Spain's

France's borrowing costs have reached levels comparable to Spain's for the first time since 2008, as fears mount over the new government led by Prime Minister Michel Barnier's ability to address the country's significant budget deficit. The yield on 10-year French government bonds hit 2.98%, amid concerns about political instability following a surprise election that resulted in a hung parliament. Analysts warn that the government will struggle to implement necessary budget cuts to comply with EU fiscal rules, with the debt projected to rise from 110.6% to 113.8% of GDP. The political fragility of Barnier's coalition, reliant on far-right support for key votes, complicates efforts to control the deficit, which is expected to reach 6% of GDP this year. Investors are increasingly skeptical of France's fiscal management, as indicated by the rising premiums required to hold French debt compared to its eurozone peers. The situation raises questions about the future of France's economic credibility within the EU, as Barnier prepares to present the budget to parliament and the European Commission by mid-October.