France’s default insurance costs top major EU peers as 10-year yields hit 4.989% and spread over Germany widens to 152 bps
The cost of insuring against a French sovereign default has risen to the highest level among major EU countries and the U.K., while the 10-year yield climbed to 4.989%, its highest since 2002. The yield premium over comparable German bonds widened to 152 basis points, the largest since the eurozone debt crisis in 2011. Investors have also focused on weak growth, a budget deficit estimated at about 5.4% of GDP, and a debt-to-GDP ratio expected to rise to 122% next year from 119% this year. The government’s latest plan has not stopped the jump in yields as investors question its credibility, according to Macquarie Group strategist Thierry Wizman.