France’s long-term borrowing costs are converging with Italy’s for the first time since the global financial crisis, as nervous bond investors put the EU’s second-biggest economy on a level with a country that has been one of its most troubled borrowers.

Yields on 10-year French government bonds have jumped above 3 per cent over the past year, as months of political instability and concerns about the public finances take their toll. This has brought France’s benchmark borrowing costs to just 0.14 percentage points less than those of Italy, whose bond yields have been driven lower as a display of fiscal prudence from Giorgia Meloni’s administration has won over investors.

The convergence has upended long-held views on France’s position as one of the region’s safest borrowers and Italy as one of its most risky, with a huge stock of public debt equal to about 140 per cent of GDP. Italy’s “spread” over France — the difference between their bond yields — ballooned to more than 4 percentage points during the Eurozone debt crisis of the 2010s.