For most of the time since the introduction of the euro, investors have always believed that France will eventually be able to withstand political and economic challenges, and is still a relatively safe investment target. Today, that belief has begun to falter. The global bond market was sold off, and the resulting decline had an impact on France in terms of both severity and speed, exceeding expectations from the outside world. Investors are increasingly worried that France's deficit will not be reduced to its original target, that policies are at an impasse, and that next year's presidential election may completely change the course of the country. France originally expected to reduce its budget deficit to 5% of GDP this year, but now the deficit is growing instead of falling. As the French government begins negotiations on a fiscal plan, and this negotiation may even lead to the collapse of the government, the signs of a crisis increase. The yield on French 10-year treasury bonds has soared more than 1 percentage point since June, the worst quarterly performance since the introduction of the euro. The performance of the French stock market also lags behind other markets. Bank of America's European fund managers survey shows that France is the least favored market for the next 12 months.

For most of the time since the introduction of the euro, investors have always believed that France will eventually be able to withstand political and economic challenges, and is still a relatively safe investment target. Today, that belief has begun to falter. The global bond market was sold off, and the resulting decline had an impact on France in terms of both severity and speed, which exceeded expectations from the outside world. Investors are increasingly worried that France's deficit will not be reduced to its original target, that policies are at an impasse, and that next year's presidential election may completely change the course of the country. France originally expected to reduce its budget deficit to 5% of GDP this year, but now the deficit is growing instead of falling. As the French government begins negotiations on a fiscal plan, and this negotiation may even lead to the collapse of the government, the signs of a crisis increase. The yield on French 10-year treasury bonds has soared more than 1 percentage point since June, the worst quarterly performance since the introduction of the euro. The performance of the French stock market also lags behind other markets. Bank of America's European fund managers survey shows that France is the least favored market for the next 12 months.