French political and budget turmoil spread into European credit markets in the week before October 6, 2026, with the French-German 10-year spread widening from about 50-60 basis points to over 170, against a 2011 record of about 190. The government is preparing to force through nearly $50 billion in spending cuts using a constitutional clause that lets lawmakers call a no-confidence vote. The 10-year yield briefly rose above 5 percent, a 24-year high, and French corporate bonds now trade as if safer than government debt. Weekend unrest brought nearly 2,400 arrests, with rioters raiding a Marseille city hall and setting Limoges city hall on fire; protests have spread to Italy, Belgium and Spain, and unions have called a nationwide strike…