Core Points - The resignation of French Prime Minister Sébastien Lecornu has triggered a political crisis, leading to increased financial market volatility and concerns among investors [1][2][3] Financial Market Impact - Following the resignation, French 10-year government bond yields surged over 0.1 percentage points, surpassing 3.6%, nearing levels seen during the 2011 Eurozone crisis [2] - The yield spread between French and German 10-year bonds widened to over 10 basis points, reaching approximately 89 basis points, the highest since January [2] - The CAC 40 index in Paris dropped about 2%, falling below the critical 8000-point mark, with significant declines in the banking sector [3] Economic Concerns - France's public debt reached €3.4 trillion, with a budget deficit rate exceeding 5.4%, both among the highest in the EU [3][4] - Political instability has led to a decline in investor confidence, with predictions of a 0.3% loss in economic growth for 2025 due to the ongoing crisis [5][6] - The uncertainty surrounding the 2026 budget proposal poses a significant challenge for the government, as failure to pass it could lead to temporary funding measures [4] Broader Implications for the Eurozone - The political turmoil in France has negatively impacted the euro, with the exchange rate against the dollar dropping significantly [7][8] - Analysts express concerns that the ongoing instability could jeopardize the entire Eurozone's economic stability, as France is a key player in the region [8] - The crisis adds to existing challenges in the EU, including slow economic growth and high borrowing costs, making it difficult to attract investment [8]