France is on the verge of a financial crisis: the budget is under threat

The French government was under threat of removal from power. The opposition parties, dissatisfied with the fiscal plans, are going to pass a vote of no confidence, which could lead to a political crisis.

This crisis is already being felt in the financial markets. Investors, fearing instability, began selling French assets, which led to an increase in the country's borrowing costs. For the first time, the rate on 10-year French bonds has equaled Greek ones, which indicates a critical situation.

Under the pressure of these events, Finance Minister Antoine Armand declared his readiness to make concessions on the issue of the budget for 2025. He stressed that any budget, although imperfect, is better than the complete absence of a budget, which threatens the economic stability of the country.

After the statement of the Finance Minister, the difference in the yield of French bonds relative to German ones decreased by three basis points to 83. This indicates that investors reacted positively to the government's intention to compromise.

Nevertheless, the situation remains tense. The decisive factor will be the vote on the budget in parliament, where the fate of the government will depend on the support of the opposition.