Eurozone finance ministers and the European Central Bank on the 8th urged France to pass its 2027 budget plan in order to stabilise the government bond market. French government bond yields have reached their highest level in about 25 years amid concerns over the huge fiscal deficit and next year's presidential election, spreading unease through financial markets. The two sides held their monthly meeting in Luxembourg on the afternoon of the 8th and discussed the sharp rise in France's borrowing costs. EU Economic Commissioner Valdis Dombrovskis said at a press conference that it is important for countries carrying high levels of deficits and debt to pursue prudent fiscal policies, and that he is in contact with Economy and Finance Minister Roland Lescure. France stated in September that its 2026 fiscal deficit is expected to exceed the government's target of 5%, and it plans to issue a record 340 billion euros, or 381 billion dollars, in government bonds in 2027. The ECB has the means to make purchases through its TPI tool if the region's government bond market becomes extremely unstable, but according to officials, no eurozone institution is prepared to help lower France's borrowing costs, and the stance is that France should resolve the uncertainty it has created itself.
Eurozone finance ministers and the ECB pressure France to pass its 2027 budget to stabilize the government bond market, aiming to bring down French bond yields that hit a 25-year high.
