French 10-Year Bond Yield Tops 5% for First Time Since 2002

France’s benchmark 10-year government bond yield briefly climbed above 5% on Oct. 21, its first move past that level since 2002, as unrest and a budget fight strained confidence in the country’s finances.

The yield on the bond, known as an OAT, crossed the threshold shortly before 5:30 a.m. ET (09:30 UTC). It later slipped to about 4.98%, still roughly six basis points higher on the day. A basis point equals 0.01 percentage point.

France is negotiating its 2027 budget in a divided parliament. Prime Minister Sebastien Lecornu has proposed spending cuts as the government faces pressure to reduce a deficit that stood at 5.1% of gross domestic product at the end of 2025. The European Union wants the deficit closer to 3%.

Protests calling for more education spending and relief from living costs have turned violent, adding to the government’s difficulty in securing support for cuts.

French Finance Minister Roland Lescure said the government could use constitutional powers if lawmakers cannot agree on a budget. Article 49.3 would allow the prime minister to push the measure through the National Assembly without a vote.