France faces a high-stakes budget battle as Prime Minister Sebastien Lecornu’s government tries to pass a 2027 budget in a hung parliament before the two-round presidential election on April 18 and May 2. Political uncertainty is colliding with investor concerns over France’s deficit, expensive platforms from hard-left and far-right candidates, and the government’s limited record of sustaining reforms under political pressure. The premium on French 10-year bonds over triple-A rated Germany has widened for three consecutive months to about 88 basis points, its highest level since late 2024, and investors say it could reach 100 basis points or more. Shares in Societe Generale, Credit Agricole and BNP Paribas fell between 3.3% and 4.3% as concerns over public finances weighed on banks exposed to the government bond market. France’s bond yields have risen above Italy’s despite Italy’s heavier debt burden. The government is targeting a modest deficit reduction to 5.0% of GDP this year from 5.1% last year, while preparing to refinance hundreds of billions of euros in pandemic-era bonds issued at very low rates. Lecornu has warned lawmakers not to add budgetary uncertainty and promised big savings measures when the bill reaches Parliament in early October. Finance Minister Roland Lescure has proposed freezing part of pension spending next year. A Harris Toluna poll showed hard-left leader Jean-Luc Melenchon and far-right veteran Marine Le Pen leading a potential runoff in four of five scenarios, with Le Pen winning against all rivals, although late surprises are common in French presidential elections. Investors and analysts remain skeptical that either the current or next president can deliver the structural reforms needed to reduce the fiscal deficit.