France, the Eurozone’s second-largest economy, is already grappling with weak economic growth and mounting public debt, leaving its government facing growing pressure to restore fiscal stability amid renewed social unrest.
The market reaction was particularly visible in government bonds, where falling prices pushed the yield on France’s 10-year debt up 8 basis points to 4.86 percent.
By comparison, Germany’s 10-year bond yield, the benchmark for the Eurozone, remained unchanged at 3.41 percent, widening the gap between French and German borrowing costs to 145 basis points, its highest level in two weeks.
Although the spread has narrowed from nearly 160 basis points earlier this month, French borrowing costs remain elevated.
In early October, the yield on France’s 10-year government bonds reached 4.99 percent, its highest level since 2002, reflecting persistent concerns over the country’s fiscal outlook.
Meanwhile, the economic consequences of the weekend’s unrest are becoming clearer, with more than 2,000 shops believed to have been affected by violence across France.
Alain Di Crescenzo, president of the Chamber of Commerce, told AFP that the total cost of the damage was expected to run into “hundreds of millions of euros”.
In Paris, police said 351 people were arrested on Sunday in connection with violence and looting in the capital.
In a statement posted on X, the Paris police department said groups consisting primarily of young people had attempted to loot and vandalise shops, prompting the arrests.
The department also called for “a firm response to such unacceptable behavior”.
The unrest adds to the challenges facing the French government as it seeks to address mounting debt and reduce the budget deficit, while political maneuvering ahead of next year’s presidential election threatens to complicate efforts to restore economic and fiscal stability.