French parliament will need 'serious' budget talks given bond market tensions

Rising French government borrowing costs will require "serious" talks in parliament on the country's budget, said government spokeswoman Maud Bregeon on Monday, as the government tries ‌to balance cutting the deficit without hurting consumers too much. "All of this ‌will clearly require a lot of rigour," said Bregeon, who also reaffirmed that the government would look to improve the public finance situation and reduce the deficit without ⁠imposing tax ​rises on ⁠French citizens.

The yields on French 10-year government bonds reached their highest level since 2008 last ⁠week, going above 4.13%. The stage is set for a potentially rocky parliamentary budget battle, ​as the government seeks to keep the deficit under control ahead ⁠of a 2027 presidential election that polls suggest could favour the far right.

French Finance ⁠Minister ​Roland Lescure had also said earlier on Monday that the government would do all it could to keep the budget deficit as ⁠close as possible to 5%. The European Commission has forecast a 2026 French ⁠budget deficit of ⁠5.1%, which would be in breach of EU rules stipulating that countries have a 3% ceiling for their ‌deficit.