“’Get your house in order’: IMF chief’s stark warning for France over surging bond yields”

What actually happened

IMF Managing Director Kristalina Georgieva told CNBC that political instability in France has put pressure on the country's government bonds, known as OATs, with investors demanding a higher yield than for Italian government bonds and French 10-year yields rising by more than 100 basis points since the start of the year. She told CNBC's Lisa Kim on the sidelines of an event in Singapore that France faces "a complication of… borrowing shock after shock after shock" compounded by political paralysis, before delivering the "get your house in order" line. Independent market data corroborates the spread: French 10-year yields were trading around 4.75-4.9%, their highest since 2002, versus roughly 4.55-4.64% for Italy.

Key facts

• French 10-year OAT yields are up more than 100 basis points since the start of the year, and independent data shows France trading near 4.75-4.9%, its highest since 2002, against Italy around 4.55-4.64%, confirming the crossover.
• There is a "very clear recognition in France that deficit needs to be brought under 5%."
• France is subject to the EU's excessive deficit procedure, with the bloc recommending the country bring its national deficit closer to a reference value of 3%; last year France's deficit reached 5.1% of GDP.
• Georgieva explicitly tempered the alarm: "The French economy is growing," and compared to the previous crisis, "we have a much more mature system in Europe," including "the strength of the European Central Bank."

What to watch for

Watch whether France's 10-year yield breaches the symbolic 5% threshold, and more importantly whether the France-Germany spread stabilizes or keeps widening toward 150bps, the level analysts flag as signalling a genuine repricing of eurozone risk rather than a global bond sell-off. Also watch whether the proposed 2027 budget, targeting roughly 5% of GDP, survives the fractured parliament given the ongoing student protests.