Borrowing costs soar on fears of French government collapse

Fears that the government of President Emmanuel Macron of France may collapse for a second time in nine months amid a looming debt crisis stoked alarm in financial markets Tuesday. Investors hammered the French stock market and pushed up the country’s sovereign borrowing costs to among the highest in the eurozone.

- LIZ ALDERMAN

Fanning the concerns was a warning early Tuesday by the French finance minister, Eric Lombard, that France may need assistance from the International Monetary Fund if the crisis cannot be brought under control. “I cannot assure you that the risk of IMF intervention does not exist,” he said in an interview on French radio.

But he later clarified in a social media post that France was “not under threat of intervention from the IMF, the ECB, or any other international organisation,” adding that France was currently financing its debt “without difficulty.”

France, a cornerstone economy in Europe, is rapidly becoming one of its weakest links. As Mr Macron has been playing the global statesman — sitting next to President Donald Trump to push a European deal for Ukraine or declaring France's recognition of a Palestinian state — the financial situation back home has been falling apart.

The turmoil mounted after Mr Macron’s prime minister, Francois Bayrou, issued a surprise call Monday for a parliamentary vote of confidence on Sept 8 to address the “gravity” of the problem. France's debt and deficit have ballooned virtually unchecked to one of the highest levels in Europe.