With eight months to France’s presidential election, French assets are showing strain. France’s borrowing premium over Germany, a key sovereign-risk gauge, is nearing its highest level since the 2012 euro-area debt crisis. Stress has spread to French equities and corporate bonds, leaving French assets lagging peers. France’s fiscal deficit tops 5% of GDP, borrowing costs are rising and growth is weak, leaving the economy close to recession. Investors’ central question is how a successor would ad

With eight months to France’s presidential election, French assets are showing strain. France’s borrowing premium over Germany, a key sovereign-risk gauge, is nearing its highest level since the 2012 euro-area debt crisis. Stress has spread to French equities and corporate bonds, leaving French assets lagging peers. France’s fiscal deficit tops 5% of GDP, borrowing costs are rising and growth is weak, leaving the economy close to recession. Investors’ central question is how a successor would address these entrenched fiscal and growth challenges. In last week’s first presidential debate, far-right frontrunner Marine Le Pen and far-left Jean-Luc Mélenchon proposed contrasting measures including higher spending, a lower retirement age, partial cancellation of government debt and proposals to suspend certain payments to the EU.