France's political chaos drives borrowing costs to the same level as Greece's for the first time

France's brewing political crisis is spilling into financial markets with the country's borrowing costs hitting the same level as debt-ridden Greece's for the first time on record Thursday.

The spread — the difference in yield between two bonds — between French 10-year government bond yields and their Greek counterparts was reduced to zero earlier Thursday. The yield on the French 10-year stood at 3.0010% while the same Greek bond stood at 3.030%.

Investors demanding the same interest for holding French debt as they would for holding that of peripheral and debt-ridden economy Greece shows the extent of concerns over political turmoil in France as the government, led by Prime Minister Michel Barnier, struggles to get support for its 2025 budget that aims to cut spending and raise taxes to curb France's yawning budget deficit.

As it stands, the left-wing New Popular Front alliance has said it will table a vote of no confidence in the government if Barnier tries to force through the budget, which envisages 60 billion euros ($63.3 billion) worth of tax hikes and spending cuts.

The far-right National Rally has threatened to support the left in the no-confidence vote, a move that would bring down the government and plunge France into further political and economic uncertainty.

New elections cannot be held until next June, twelve months on from the last parliamentary elections that saw both the far-left and far-right perform well in the first and second round of the vote but both failing to win a majority of the seats. As such, following the election, President Emmanuel Macron put conservative Barnier in charge of a minority government following the election.

French officials looked to defend the economy on Thursday, but acknowledged