Greece's 10-year government bond yield is now sitting below France's, a striking reversal that would have been unthinkab...

Greece's 10-year government bond yield is now sitting below France's, a striking reversal that would have been unthinkable just a few years ago. France's 10-year yield climbed back toward 4.9% on Monday after violent weekend protests hit investor confidence, while Greece's equivalent stood near 4.4% on October 19. At one point in early October, France's yield touched 4.99%, its highest level since 2002. The gap reflects a decade of fiscal discipline in Athens and a decade of fiscal drift in Paris. Greece ran a budget surplus of 1.7% of GDP in 2025 and cut its debt ratio by more than nine percentage points in a single year. France, by contrast, is carrying debt of 3.6 trillion euros, equal to 119% of GDP, and is projecting a deficit of 5.4% of GDP this year. France's interest bill tells the real story. The government expects to pay 91 billion euros just to service its debt in 2027, up nearly 12 billion euros from this year. Its 2027 budget calls for a 54 billion euro fiscal adjustment to bring the deficit down to 5% of GDP, a plan facing a deeply divided parliament and ongoing street protests over living costs and public services. The reversal isn't only about France and Greece. Belgium now borrows at almost exactly the same rate as Greece. Portugal pays less than Spain. Ireland pays roughly what the Netherlands does. The old north-south divide in European bond markets has essentially flipped. Greece's position comes with caveats. The country's debt remains the highest in Europe as a share of GDP, and new borrowing still costs more when all factors are accounted for. What insulates Athens is the unusually long average maturity of its debt, at 18.28 years, and substantial cash reserves, which reduce the immediate pressure of refinancing. If France's spread over Germany widens much further, economists at Oxford Economics warn that France could face a liquidity crisis, with its 10-year yield potentially reaching 7% by mid-2027 in a severe scenario. #Greece #France #EuropeanEconomy