French Debt: The OAT/Bund Spread Remains Close to Its Highest Since 2012

OAT at 4.477%: Spread Remains Above 100 Basis Points

As of September 23, the yield on the French 10-year government bond stands at 4.477%, compared to around 3.46% for the German Bund of the same maturity. The OAT/Bund spread is thus at 101.7 basis points, representing a slight easing of 0.3 basis points compared to the 102.0 basis points observed on September 22.

The tension has significantly increased since mid-August. The 100 basis point threshold was crossed on September 18 for the first time since 2012, according to Reuters. The spread then temporarily fell below this level before returning to 102.0 basis points on September 22 and then to 101.7 basis points on September 23. This development indicates a marked rise in the relative risk premium associated with French sovereign debt compared to German debt.

French Public Finances Remain a Central Concern

The OAT/Bund spread measures the gap between the yields of French and German sovereign bonds of the same maturity. Its widening indicates that investors are demanding a higher additional yield to hold French debt rather than the German Bund, which is generally considered the sovereign benchmark in the eurozone.
The recent movement occurs amidst ongoing tensions surrounding France's budgetary trajectory. In its forecasts published in May 2026, the European Commission anticipated a French public deficit of 5.1% of GDP in 2026 and public debt reaching 118.1% of GDP.

French budgetary and political concerns were also cited by Reuters among the factors contributing to the recent widening of the spread.
The current level remains below the peaks observed during the European sovereign debt crisis of 2011, but the spread's return to around 100 basis points marks a notable change compared to the levels observed a few weeks earlier. However, recent fluctuations show that the movement is not linear: phases of easing have alternated with new surges in the Franco-German differential.