June 14 (Reuters) – The yield gap between French and German long-term bonds rose to 80 basis points (bp) on Friday, in reaction to uncertainties linked to the early legislative elections decided by Emmanuel Macron last Sunday.
The “spread”, or the difference in yield between the 10-year German Bund, the euro zone benchmark, and the equivalent French OAT climbed to 80.64 basis points at 10:42 GMT, up more than ten points, while it was around 50 basis points before the European elections which saw a breakthrough of the far right in France.
The yield on the French 10-year OAT stands at 3.174%, while its German equivalent falls sharply, by more than 12 bp, to 2.366%. In comparison, the yield on sovereign bonds of the same maturity of Greece, a country which was the epicenter of Europe’s debt crisis in 2009, currently stands at 3.64%.
The Minister of the Economy, Bruno Le Maire, warned on Friday of the risk of a financial crisis in France if the union of the left or the extreme right were to win the legislative elections scheduled for June 30 and July 7. (Written by Diana Mandiá, edited by Claude Chendjou)
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