France is experiencing its most severe sovereign debt stress in over a decade, with 10-year government bond yields briefly approaching 5% this week — the highest since 2002 — while the spread over German Bunds widened to approximately 150 basis points, a level not seen since the eurozone debt crisis of 2011-2012.
In a stunning reversal for the EU's second-largest economy, investors now demand higher yields to lend to France than to Italy or Greece, nations long considered Europe's fiscal problem children.
