Analysts caution that the spread between French and German government bonds has already widened to about 150 basis points, and if France's fiscal risks deteriorate further, the spread could still widen substantially.

During the European sovereign debt crisis, the Italian bond spread once exceeded 500 basis points.

France's debt burden is heavy and political divisions are intensifying, making fiscal consolidation extremely difficult; if the European Central Bank provides unconditional support, it could weaken France's incentive to cut its deficit, but if it refuses to intervene, it could push up financing costs and further increase debt pressure.

French government bonds are facing an increasingly severe pricing test.

The French-German bond spread has widened to about 150 basis points, a level rarely seen in history, but bond market analyst Robert Burrows warns that a wider spread does not mean French government bonds have sufficient investment value.

If investors still bet on the spread returning to its historical average, they may underestimate the room for France's fiscal risks to deteriorate further.

France's problem lies not only in its heavy debt burden, but also in intensifying political fragmentation and the difficulty of advancing fiscal consolidation.

At the same time, Germany's economic and fiscal capacity to provide support is also being questioned.

The interwoven risks of these two major economies mean the problem is no longer confined to France alone, and could shake the stability of the eurozone as a whole.

Burrows wrote on the Bond Vigilantes website that during the European sovereign debt crisis, the spread between Italian government bonds and German government bonds once exceeded 500 basis points.

This is not a forecast for the direction of the French spread, but rather an illustration that once the market loses confidence in fiscal sustainability and European rescue mechanisms, the spread could far exceed the range shown by historical experience.

There is also uncertainty over whether the European Central Bank can effectively control risks.

Unconditional support for France could weaken its motivation for fiscal consolidation, while refusing to intervene could push up financing costs, worsen debt pressure, and transmit risks to other member states.

Meanwhile, whether Germany can continue to serve as the eurozone's "anchor of stability" is also facing a test.

Historical Spreads No Longer Reliable, Eurozone Rescue Capacity Faces a Test

For investors accustomed to viewing France as a core sovereign debt issuer in the eurozone, a French-German spread of about 150 basis points may be seen as a signal of excessive market pessimism, and thus become a reason to bet on the spread narrowing.

But this strategy relies on one premise: that France's fiscal condition and credit risk have not fundamentally changed.

Burrows believes this premise is being challenged.

During the European sovereign debt crisis, the spread between Italian government bonds and German government bonds once exceeded 500 basis points.

This historical case does not mean the French spread will necessarily reach the same level, but it shows that when the market begins to question fiscal sustainability and the rescue capacity of European institutions, the spread can break well beyond its historical range.

The European Central Bank's policy tools also have limits.

Its Transmission Protection Instrument (TPI) is designed to address disorderly market fluctuations not justified by fundamentals, but when activating it, the fiscal sustainability of the relevant country and its compliance with the EU policy framework must be assessed.

If the rise in the French spread reflects a deterioration in fiscal fundamentals rather than unjustified market pressure, the room for European Central Bank intervention may be limited.

This puts European institutions in a dilemma: unconditional support for France may weaken its incentive to advance fiscal consolidation; refusing to intervene may push up France's financing costs, further worsen its debt situation, and intensify risk transmission within the eurozone.

Therefore, whether France can present a credible fiscal consolidation plan is crucial, and the upcoming presidential election adds uncertainty to policy continuity.

Germany's supporting capacity should also not be overestimated.

During the crisis, capital flowing into German government bonds and driving their outperformance relative to other eurozone government bonds reflected more of investors' safe-haven demand, and does not mean Germany has sufficient fiscal space to support other member states without limit.

With France's fiscal pressure intensifying and Germany's supporting capacity being questioned, the buffer mechanism for the eurozone to deal with sovereign debt risks may weaken.

The French-German bond spread is therefore not just a barometer of France's credit risk, but also a test of whether European institutions can prevent risk contagion.

France's debt is difficult to resolve easily, and once the crisis spreads, Europe may not necessarily be able to bail it out easily either.

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