The cost of French debt has just crossed a symbolic threshold. On September 18, 2026, the yield on the 10-year OAT reached 4.55% and its gap over the German Bund exceeded 100 basis points, a first since 2012. This spread still stood at around 60 points at the end of May. Even more striking, Paris now borrows at a higher cost than Rome.
The rise reflects a distrust specific to France. The public deficit is expected to reach 5.4% of GDP in 2026, the growth forecast has been cut to 0.5%, and the government must find €54 billion in savings for the 2027 budget. The approaching presidential election adds a political uncertainty that investors are pricing in. The move is also part of a global rise in long-term rates, with the US 10-year yield having climbed above 5%.
Banks are on the front line: as major holders of OATs, they see the value of their portfolios fall and their funding costs rise. On August 27, 2026, BNP Paribas, Société Générale and Crédit Agricole lost between 3% and 5% in a single session. Next come real estate companies, whose valuations move inversely to rates, followed by concession operators and utilities, which are exposed to windfall taxation. Companies that depend on public procurement complete the list.
The concern is justified for the debt, but exaggerated for the stock market as a whole. Fitch kept France’s A+ rating with a stable outlook on August 28, 2026, the European Central Bank has an anti-fragmentation instrument, and the large CAC 40 groups generate most of their revenue outside France.
The risk therefore remains sectoral rather than systemic. A spread settling durably above 120 points, a scenario Société Générale does not rule out, would however change the picture.