France’s borrowing costs overtake Italy as European debt rankings shift

France is now borrowing at higher interest rates than Italy, while Belgium’s 10-year bond yield reached 4.29%, near Greece’s 4.35%, Dünya reported. The shift comes as investors reassess the finances of countries once seen as safer borrowers.

France’s public debt has risen to €3.6 trillion, or 119% of national output, according to the report. The French Treasury plans to borrow €340 billion through medium- and long-term bonds in 2027, above the €310 billion projected for 2026 and a record amount.

Much of that borrowing is to refinance maturing debt, rather than fund new spending. France’s average rate on new bond issues climbed to 3.55% from 3.14%, and annual interest costs are expected to rise from €62.6 billion in 2026 to €72.9 billion in 2027.

The International Monetary Fund said average 10-year yields across G7 countries rose by more than one percentage point between February and September, reaching their highest level in about 20 years. It also warned that around 30% of public debt in G7 countries and Spain comes due within a year, making budgets more exposed to higher rates.

The report said experts do not see current conditions as pointing to a repeat of the 2012 debt crisis. Lombard Odier said markets are pricing political and fiscal uncertainty, and that French bond risk premiums could stay high until the country has a credible budget plan.