France’s minority government has presented its 2027 budget amid intensifying scrutiny of the country’s public finances, with the 10-year government bond yield reaching 4.924% on Oct. 1, its highest level since 2002. The plan combines €43 billion of spending cuts and tax measures, targeting a deficit reduction to 5% of GDP from 5.4%, but France’s fiscal watchdog has called the growth assumptions optimistic. Debt stood at 119% of GDP in the second quarter, planned bond issuance is a record €340 billion next year and interest costs are projected to rise to €91.2 billion from €62.6 billion. The France-Germany 10-year yield spread widened to 1.4 percentage points, while hedge funds reduced French bond exposure or increased short positions. Political divisions, protests, possible parliamentary amendments and uncertainty ahead of next year’s presidential election could complicate fiscal consolidation, although Reuters reported that the market stress does not yet amount to a euro-zone crisis.