French 10-year bond yields tops Italy levels after PM falls

France's borrowing costs exceeded those of traditional European debt laggard Italy on Tuesday, reflecting investor worries over the country's finances and political stability after Prime Minister Francois Bayrou's ouster.

The yield on 10-year French bonds rose to 3.48 percent, compared to 3.47 percent for Italian bonds -- a situation unseen in years.

The Paris stock market, however, was up in morning trading as traders had anticipated that Bayrou would lose Monday's confidence vote in parliament that toppled this government after nine months in power.


Bayrou had blindsided even his allies by calling the vote to end a lengthy standoff over his austerity budget, which foresaw almost 44 billion euros ($52 billion) of cost savings to reduce France's debt pile.

France's debt has reached 3.3 trillion euros, or 114 percent of its gross domestic product.

President Emmanuel Macron will now have to find a new prime minister.

Bayrou was the sixth prime minister under Macron since his 2017 election and the fifth since 2022.

"France has just entered a new zone of turbulence," said John Plassard, head of investment strategy at Cite Gestion Private Bank.