France's Debt and Political Risks

The euro has declined against the US dollar by approximately 5% since the beginning of 2026, reaching its lowest level in 17 months. This decline is due to concerns over debt in the Eurozone, particularly France, increasing yields on its government bonds, and rising oil prices. The downturn is attributed to the market's reassessment of US monetary policy expectations and a rise in global bond yields, coupled with investors' worries about France's weak public finances, which have accumulated debt exceeding one trillion euros and a national debt-to-GDP ratio of 118%. It is expected that pressure on the euro and European bond markets will continue, with warnings of a potential escalation of a new sovereign debt crisis in the region, although some experts believe the situation does not reflect a crisis similar to previous episodes.

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