France’s growing debt woes: How bond markets set countries’ borrowing costs

France’s borrowing costs have surged amid the worst social unrest in the country in decades. Yields on French bonds have risen to their highest levels in nearly a quarter of a century as investors demand higher returns for taking on government debt. The surge reflects a growing conviction in bond markets that lending to France is becoming an increasingly risky proposition. While France is grappling with a widening gap between government spending and revenues, the country’s fragmented political landscape is bitterly divided on how to plug the hole.