French President Emmanuel Macron has criticized comments by foreign leaders, including Donald Trump, on the unrest in France. At the same time, the yield on France's 10-year government bonds hit a 24-year high. More rallies are planned for the weekend.
Macron told reporters on Wednesday that foreign disinformation after the country's mass protests and worst rioting in years prompted comments from many people, including foreign leaders. According to Reuters, he called them "as unacceptable as they were stupid".
Macron clarified he meant U.S. President Donald Trump among others, and said politicians were using the situation in France for their own ends. Trump had blamed the unrest on migrants, jihadists and Communists on his Truth social platform earlier this week and told Europe to close its borders.
US officials and Iran join the debate
Trump and other Republicans, including Vice President JD Vance and House Speaker Mike Johnson, have referenced the unrest on the campaign trail ahead of the U.S. midterms. They have claimed that Democrat policies on immigration would raise similar tensions.
The sparring reached government agencies. U.S. Immigration and Customs Enforcement posted footage on X that appeared to reference rioters in France, and the French foreign ministry replied with a graphic on U.S. firearm homicides compared with G7 peers. Iran's Foreign Minister Seyed Abbas Araghchi also called on Macron to listen to the protesters' demands.
Tensions remain high at home. Student union UNEF and the anti-establishment yellow vest group have both called for further rallies this coming weekend, and Interior Minister Laurent Nuñez said some military forces would be deployed to help maintain order.
French bond yields hit a 24-year high
The political turmoil is compounded by an emerging fiscal crisis. The yield on 10-year French government bonds rose another 11 basis points on Thursday morning to 5.113%, a 24-year high that surpassed the 10-year U.S. Treasury yield for the first time since 2013.
Investors are increasingly skeptical that France will pass a program of fiscal consolidation. Parliament is debating the 2027 budget, but the government lacks a majority and may resort to special powers, which would likely stoke further political volatility. Rising debt servicing payments also raise the specter of intervention by the European Central Bank if the spread against Germany continues to widen.
Morningstar estimated insured losses at up to 1.2 billion euros ($1.34 billion), assuming no further significant impact. Its sovereign ratings analyst Mehdi Fadli said the direct economic impact is likely to be limited, but noted the government's revision of its 2026 real GDP growth forecast to 0.5% from 1%.
Source: CNBC
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