France’s government borrowing costs have soared after newly appointed Prime Minister Sebastien Lecornu resigned just hours after unveiling his cabinet.
Bond yields surged and French stock markets fell as Lecornu stepped down amid mounting threats from both allies and opposition parties to bring down his government.
His sudden resignation deepens France’s ongoing political turmoil, leaving the country searching for its fourth prime minister in less than a year.
The far-right National Rally quickly called on President Emmanuel Macron to dissolve parliament and hold snap elections.
France’s political instability and soaring public spending have rattled investor confidence, pushing its borrowing costs above those of Italy, Greece, and Portugal. The gap between French and German bond yields has now widened to its largest level this year.
France’s Stock Market Tumbles
The French stock market suffered its steepest fall in two months following the unexpected resignation of the country’s prime minister.
The CAC 40 index dropped 2.1%, making it the worst-performing major index in Europe.
Banking stocks led the decline, with BNP Paribas, Société Générale, and Crédit Agricole plunging between 5% and 7%, as investors reacted to their heavy exposure to French government bonds.
