The likely fall of François Bayrou, announced for 8 September 2025 following a vote of confidence in the National Assembly, is part of the political instability that France has been experiencing for over a year. Many French people are wondering what impact this could have on their assets or investments and are even considering moving their funds to what they consider to be the safest places (gold, Switzerland, Luxembourg, ‘mattresses’, etc.). This situation, which is raising questions among our partners, could have economic repercussions, both on the country's sovereign rating and on interest rates on government bonds, which have already begun to rise.

The departure of François Bayrou, a symbol of political instability.

By calling for a vote of confidence on the basis of Article 49.1 of the Constitution, François Bayrou took the risk of dissolving his government. In addition to this instability, the already tense budgetary environment and lack of visibility are fuelling fears among markets, lenders and rating agencies about France's ability to meet its financial commitments.

What are the consequences for French government bond interest rates?

Rating agencies (S&P, Moody's, Fitch) are closely monitoring the political situation in France, and since last year, uncertainty has already impacted interest rates on government bonds, known as OATs (Obligations Assimilables du Trésor). They have reached levels not seen in over fifteen years, and the spread between French and German rates is widening further. A downgrade of France's rating by Fitch, expected on 12 September, could further impact the rates demanded by investors to finance public debt.

And for the French?

The rise in interest rates is having an impact on public finances. Every year, the state borrows funds, around €300 billion in 2025! With this upward trend, the amount of interest payable to lenders increases every year. If GDP growth, which represents the creation of ‘wealth’ by all economic actors, is not high enough, there will be two possible choices. Either the government will be forced to arbitrate its budget and limit investments that may be necessary, or it will increase resources by raising taxes. In both situations, this will have an impact on the lives of French citizens. France has many assets! Not only does it have numerous real estate and financial assets, and the French have substantial savings, but above all, the state has a great capacity to raise taxes.

As in any period of uncertainty, we tend to take a wait-and-see approach, yet now more than ever, it is important to make choices about our investments. When the government relies on funds from regulated savings accounts for housing construction (Livret A) and socially responsible investments (LDDS), it is pursuing its projects. In the same way, it is important for everyone to continue investing ‘in the future’ and to carry out their own projects. Opportunities exist at all times. All you need is a personalised wealth management strategy tailored to your wishes and objectives. That is why it is important to seek professional advice. Finankap's team of wealth management specialists is here to support you.

Being resilient is good, but being actively involved in your investments is even better! Contact us!

In a changing world, Finankap is here to bring your dreams to life.