France Faces Nationwide Student Protests as Bond Markets Come Under Pressure

PARIS: France faced a major day of nationwide student demonstrations on Tuesday as high-school students, teachers and parents took to the streets to demand greater government investment in schools, while mounting concerns over the country’s public finances continued to weigh on financial markets.

Hundreds of schools were blockaded across France as protesters called for action over understaffed schools, deteriorating buildings and inadequate educational facilities. Demonstrations were reported in cities including Marseille, Nantes, Lyon and Paris, with the largest rally expected in the capital later in the day.

The protests have grown over the past two weeks after initially emerging in disadvantaged suburbs of Paris. The movement has increasingly placed pressure on the government of Prime Minister Sébastien Lecornu, which is already struggling to reduce France’s large budget deficit while facing resistance over proposed spending cuts.

Tensions escalated on Monday when a teenager lost a hand during clashes with riot police in northern France. Authorities have deployed large numbers of security forces, saying that parts of the movement have developed into urban violence.

The Interior Ministry said about 6,100 people had been arrested since the protests began, most of them minors. More than 1,800 people were facing prosecution, including 1,483 minors. At least 715 police officers and 215 teenagers have reportedly been injured in clashes.

Growing Pressure on Government Finances

The demonstrations come at a particularly difficult time for France’s economy. Investors have become increasingly concerned about the country’s rising debt, political uncertainty and the government’s ability to reduce its budget deficit.

France’s 10-year government bond yield briefly exceeded 5% last week, reaching its highest level in 24 years. The increase in borrowing costs has also begun to affect wider euro zone markets, while the euro recently fell to a 17-month low amid concerns about French fiscal stability.

The government has promised to examine the condition of ageing school buildings and other problems raised by students. Lecornu has asked ministers to present initial proposals by the end of October. However, finding additional funding is expected to be difficult given the government’s efforts to reduce public expenditure.

Finance Minister Roland Lescure said on Tuesday that there was no immediate need for the European Central Bank to intervene in French bond markets.

Political Stakes Rise

The unrest is unfolding just months before France’s next presidential election and has become part of a wider political struggle over government spending and the country’s economic direction.

Far-right presidential frontrunner Marine Le Pen has sought to portray herself as fiscally responsible by proposing major reductions in public spending if she wins the election. She has increased her proposed savings target to €140 billion, up from €125 billion previously.

The government and Le Pen’s National Rally party have accused the left-wing France Unbowed party of encouraging the protests. France Unbowed has rejected the accusation, while some of its local politicians have expressed support for the students.

With the protests continuing and financial markets closely watching France’s fiscal situation, the government faces the difficult task of addressing demands for greater public investment while simultaneously convincing investors that it can bring the country’s debt and deficit under control.

The developments have added to a growing sense of political and economic uncertainty in France ahead of next year’s presidential election.