Politics
European governments tighten budgets as bond markets drive borrowing costs to decades-long highs
October 10, 2026 at 05:59 PM
Coverage
2 reports · 1 in Arabic, 1 in English · over 12 hours
Rising bond yields across France, Italy and Britain have pushed European governments to trim spending plans and pledge tighter deficits.
- Yields on French 10-year bonds hit their highest level since 2002, approaching 5 percent, as investors demanded higher risk premiums.
- France presented a 43-billion-euro package of measures to narrow its budget deficit from 5.4 percent to 5 percent of GDP by 2027.
- Italian Prime Minister Giorgia Meloni cut planned defense borrowing by up to 8 billion euros after the rise in borrowing costs.
- European Central Bank chief economist Philip Lane said governments must adapt to the changed interest-rate environment.