France in turmoil: What might follow a weekend of riots?
SPY•Riots and looting across France damaged or pillaged more than 3,000 shops and led to about 2,400 arrests. The unrest has weighed on French stocks and bonds, pushing the risk premium over 10-year German bonds to 146 basis points.
1. Government response
Authorities are increasing police presence, organizing partial curfews in some municipalities and investigating looting. The government is also preparing state-financed furlough measures and cash-flow support for affected businesses, but has not provided full details.
2. Protests and economic pressure
Protests began last month over teacher shortages and poor school facilities, then broadened amid anger about living costs and public services. The government has pledged to send about 3,000 qualified teachers to fill staffing gaps, while France’s strained public finances leave little room for broader measures.
3. Political and market effects
Further demonstrations have been called for October 24, and unions plan strikes on November 5. The unrest has weakened business confidence and weighed on French stocks, the euro and government bonds; the risk premium over 10-year German bonds rose to 146 basis points, its highest in two weeks. The article says the crisis may boost Marine Le Pen’s presidential candidacy, while President Emmanuel Macron has emerged further weakened.
