France-Germany bond spread hits 131 bps, highest since 2012

The yield spread between French OATs and German Bunds widened to 131 basis points, the highest level since 2012, pushing French long-term borrowing costs to near 25-year highs. This reflects market concerns over France's fiscal trajectory amid political instability and stalled deficit reduction. The widening spread signals rising sovereign risk in the eurozone's second-largest economy, potentially pressuring French banks and adding to regional financial fragmentation.