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Victory for French far right could trigger Liz Truss-style debt crisis, warns finance minister

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Victory for French far right could trigger Liz Truss-style debt crisis, warns finance minister

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France’s finance minister has warned that the country could face a debt crisis akin to the UK’s gilt market turmoil under former prime minister Liz Truss if the far-right Rassemblement National wins snap elections this month and next.

In a sign of market nerves, French government bonds have sold off sharply since President Emmanuel Macron’s shock announcement on Sunday that he would dissolve parliament and call fresh elections after his party was routed by the far right in European elections.

The sell-off has pushed the gap between French and German borrowing costs to its highest level since October. The cost of some maturities of French debt has also risen above those of Portugal, which defaulted during the Eurozone crisis and had a junk credit rating for much of the past decade.

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“If the RN implements its programme, a debt crisis is possible. A Liz Truss-style scenario is possible,” finance minister Bruno Le Maire told local party officials on Tuesday night.

A crisis erupted in the UK bond market in 2022 when Truss put forward a Budget that would have implemented tens of billions of pounds worth of unfunded tax cuts. Truss was forced to resign after only 44 days in office, but not before the crisis had knocked hundreds of billions of pounds off the value of UK pension schemes.

Le Maire warned that France “simply [does] not have the means to finance [RN leader] Marine Le Pen’s additional tens of billions of euros” in costs associated with the party’s agenda to cut sales taxes and raise the retirement age. The RN did not immediately respond to a request for comment.

The yield on benchmark 10-year French bonds rose as much as 0.22 percentage points on Monday and Tuesday to more than 3.33 per cent at one stage, pushing the premium on France’s borrowing costs over Germany’s to 0.62 percentage points. 

French bonds later partially reversed losses to trade at a yield of 3.25 per cent on Wednesday. However, investors remain concerned that, should the RN take or share power, its plans for tens of billions of euros of extra public spending could prevent any improvements in the country’s yawning budget deficit.

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François Villeroy de Galhau, governor of the Bank of France, on Wednesday warned that the country needed to clarify its spending trajectory as soon as possible.

“It will be important that, whatever the outcome of the vote, France can quickly clarify its economic strategy and in particular its budgetary strategy,” he told Radio Classique on Wednesday morning. “Electoral periods are always accompanied by uncertainty . . . but investors do not like uncertainty.”

The heavy selling of French bonds this week follows rating agency S&P’s decision to lower its rating on French debt at the end of May to double A minus, pouring cold water on the French government’s efforts to improve its public finances. 

“When you look at French debt metrics the deficit is an issue and I think that, combined with political uncertainty, makes it no surprise that spreads have widened,” said Andrew Balls, chief investment officer for global fixed income at bond giant Pimco. Markets were “pricing the risk appropriately”.

Line chart of French sovereign 10-year borrowing cost over Germany showing France's risk premium has shot up this week

France’s budget deficit was far above target at 5.5 per cent last year, which puts France on the EU’s excessive deficit procedure list. According to new EU rules that kick in next year, France will need to reduce its structural deficit by 0.5 per cent per year until the overall deficit comes below 3 per cent. 

The government has also pledged to bring the deficit below 3 per cent by 2027. Cedric Gemehl, analyst at Gavekal Research, said those plans “did not look credible to begin with” and “even less so now”, adding that “further downgrades look probable”. 

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Jason Davis, global rates portfolio manager at JPMorgan Asset Management, said he has held a lower-than-benchmark weighting in French government bonds for some time. “The snap election increases uncertainty over the trajectory of France’s fiscal sustainability and subsequent credit ratings,” he said.

Still, France’s bond sell-off remains more muted than in 2017 when Le Pen finished second in the first round of voting for the French presidency, pushing the spread in borrowing costs between the Eurozone’s second-largest economy and Germany to 0.8 percentage points.

Since 2017, Le Pen has rowed back on her plans to pull France out of the EU. Analysts say that the widening of the spread this time should be less intense in the coming months, but warned that France’s presidential elections in 2027 could pose a bigger risk to markets should Le Pen remain far ahead in the polls.

“In a nutshell, the key issue for markets is the possible fiscal implications from a Le Pen majority rather than an existential one such as potential Frexit,” said Meera Chandan, global FX strategist at JPMorgan Chase. 

Additional reporting by Kate Duguid in New York

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Federal judge halts Trump’s election executive order seeking to create a federal voter list

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Federal judge halts Trump’s election executive order seeking to create a federal voter list

BOSTON (AP) — A federal judge on Thursday halted President Donald Trump’s executive order that sought to create a federal voter list and limit who can receive a mail ballot.

U.S. District Court Judge Indira Talwani, who was nominated by Democratic President Barack Obama, sided with a coalition of nearly two dozen states that challenged the Republican president’s order in granting a summary judgment. Her ruling applies to this year’s midterm election cycle.

Plaintiffs argued in two lawsuits, both filed in federal court in Boston, that Trump’s order should be found unconstitutional because the states and Congress, not the president, have the power to set election rules. The judge agreed, noting in her ruling that the provisions of Trump’s order “unconstitutionally violate the separation of powers.”

It was the second ruling in as many days against executive orders Trump has signed seeking oversight of the nation’s elections. A separate ruling Wednesday prohibited an executive order he had signed last year that would have required people to show documents proving their citizenship when registering to vote.

The administration, in its motions to dismiss the lawsuits challenging the order seeking to establish a federal voter list, argued that the motions are premature and that plaintiffs lacked the legal basis to bring their claim based on the Administrative Procedure Act, which governs how federal agencies develop and issue regulations.

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But in an interim order before Thursday’s ruling, Talwani said the motions pertaining to this year’s election cycle were relevant: “In light of the EO’s specific deadlines over the next three months, and the reality that elections will be occurring throughout this period with the November 3, 2026 midterm occurring in just five months, postponing judicial review is impracticable and may inflict significant hardship on Plaintiffs,” she wrote. That order denied the Trump administration’s motion to dismiss the challenges.

Trump’s executive order, the second one aimed at elections during his second term, comes as he continues to raise the specter of widespread voting by noncitizens as a reason to change election rules. But states already have detailed processes aimed at keeping their voter rolls accurate, and voting by noncitizens has been shown to be rare. It also is a felony that can be punishable by deportation.

Trump issued his second order in March after a bill he supported to overhaul voting stalled in Congress. The order would have had the federal government create a list of eligible voters and then directed the U.S. Postal Service to deliver mail ballots only to those on the list. Election officials argued that it was ripe for abuse and could cause chaos, and the postal union has objected to the idea of mail carriers policing ballots.

The Postal Service has published a proposed rule required by Trump’s executive order in the Federal Register. Among other things, the rule would not apply to primary elections or overseas ballots.

The lawsuit seeking summary judgment was filed by Democratic attorneys general representing 22 states and the District of Columbia. Also signing on were attorneys representing Democratic Gov. Josh Shapiro of Pennsylvania, which has a Republican attorney general.

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The states also told the court that the move imposes a costly burden on election officials to comply and would spread fear about the possibility of prosecution. Stephen Pezzi, a lawyer for the Trump administration, had argued that no one would be prosecuted for violating the order.

In a separate lawsuit filed against the executive order, a federal judge in Washington, D.C., in May agreed with the Trump administration that it was too early to block the order because it had yet to be implemented. That lawsuit was brought by Democratic and civil rights groups, who have appealed.

Since his 2020 presidential election loss to Democrat Joe Biden, Trump has groundlessly claimed mail voting is rife with fraud and has launched a federal investigation into that year’s vote, even though repeated audits and investigations, including ones run by Republicans, found it was free of widespread fraud. Trump also has said he wants to “take over” election administration in Democratic areas.

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With a Round of 32 spot already clinched, the U.S. takes on Turkey in the World Cup

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With a Round of 32 spot already clinched, the U.S. takes on Turkey in the World Cup

Folarin Balogun (r) of the U.S. celebrates scoring his team’s second goal with Weston McKennie during their World Cup match against Paraguay on June 12 in Inglewood, Calif. The U.S. defeated Paraguay and, later, Australia. The U.S. wraps up group play against Turkey on Thursday evening. Win, lose or draw, the U.S. has already won its group and will advance to the knockout round.

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INGLEWOOD, Calif. — For the U.S. men’s national soccer team, a loss in Thursday night’s FIFA World Cup game against Turkey wouldn’t change anything.

A win, though, would be history.

The squad’s earlier wins over Paraguay and Australia, plus two losses by Turkey to the same teams, mean the Americans have already won their group and clinched a favorable path in the knockout round, no matter the outcome of Thursday’s game.

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But the American men have never won more than two games in a single World Cup. A third win would be new territory for this team, which has not been shy about its aspirations in this tournament and its confidence about living up to them.

“The group stage is not done yet. We want to end it the right way. We want to end it the way we came into it and continue to build off of the momentum that we’ve been creating,” said defender Mark McKenzie, speaking to reporters Wednesday.

Because the outcome of the game does not affect knockout-round placement, the U.S. can rest key starters who will enter the match with a yellow card. For those players — defenders Antonee Robinson and Chris Richards, midfielder Tyler Adams and forward Folarin Balogun — picking up a second yellow card against Turkey would result in a suspension in the Round of 32. (Any single yellow cards will be cleared after the group stage concludes.)

The team could also choose to ease in forward Christian Pulisic, who is expected to be available for the game after sitting out the U.S.-Australia game with a minor calf injury.

Turkey had come into the World Cup with high expectations. With talented young stars like the 21-year-old attackers Arda Güler of Real Madrid and Kenan Yildiz of Juventus, the team was thought by many — from analysts to the players themselves — to be a dark horse capable of a deep run.

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Federal judge bars Trump from implementing proof of citizenship requirement to vote

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Federal judge bars Trump from implementing proof of citizenship requirement to vote

A federal judge on Wednesday permanently barred President Donald Trump’s administration from implementing most of his first executive order on elections, part of which sought to require people to show documentary proof of citizenship when they register to vote.

The ruling by U.S. District Court Judge Denise Casper in Boston effectively converts a preliminary injunction she issued a year ago, in which she temporarily blocked many of Trump’s efforts to overhaul elections, into a permanent ban.

Casper rejected the Republican administration’s argument that the lawsuit to block the changes brought by Democratic state attorneys general was premature because the rules had yet to be put in place. Instead, she agreed that the Constitution gives states and Congress the authority to regulate elections, and that Trump’s requirements violated the separation of powers.

The Constitution “does not grant the President any specific powers over elections,” wrote Casper.

Among other proposed changes, Trump’s order would have required people to provide documentary proof of citizenship when registering to vote, prevented mail ballots from being counted if they arrive after Election Day, even if they were postmarked by then, and punished states that failed to comply by withholding certain federal money.

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In a statement, New York Attorney General Letitia James said she was grateful the court had blocked Trump’s “unconstitutional attempt to seize control of our elections” and would continue to defend voting rights in this year’s midterm elections.

“Generations of Americans fought tirelessly for the right to vote, and we honor their legacy by protecting that right against anyone who tries to undermine it,” said James, a Democrat.

A voter casts a ballot during New York’s primary election on Tuesday, June 23, 2026, in New York. (AP Photo/Ryan Murphy)

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California Attorney General Rob Bonta, whose state was the lead plaintiff in the case, said the ruling reaffirmed the constitutional principle that it s up to the states and Congress to set election rules.

“While we are proud of this result, we are clear-eyed that President Trump’s attacks on voting rights and our elections show no signs of slowing down,” Bonta, a Democrat, said in a statement. “So let me be clear: we will keep fighting back every step of the way.”

Requests for comment sent to the White House and he U.S. Department of Justice were not immediately returned.

The ruling was the latest in a series against the elections executive order Trump signed just months after taking office for his second term. The Republican president has since signed another executive order on elections that seeks to create a national voter list and limit mail balloting. That directive also faces multiple legal challenges.

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Last fall, a federal judge in Washington, D.C., overseeing a separate challenge to the first election executive order by civil rights and Democratic Party-aligned groups blocked the government from taking steps to include the proof-of-citizenship requirement on the federal voter registration form. That judge later barred Trump’s defense secretary from requiring documentary proof of citizenship when military personnel register to vote or request ballots.

In an apparent nod to the difficulty of implementing a proof-of-citizen requirement by executive order, Trump is pushing legislation in the Republican-controlled Congress to create such a mandate. The SAVE America Act has passed the House but has stalled in the Senate, leading Trump to advocate for eliminating the filibuster that is blocking the legislation.

On Wednesday, he abruptly canceled the expected signing of a bipartisan housing bill, saying he would not sign legislation until Congress passes his proof of citizenship requirement for voting.

The president and many of his Republican allies have been promoting the narrative that voting by noncitizens is a major problem, when in fact it’s quite rare. The federal voter registration form already requires people to attest that they are U.S. citizens. Violating that is punishable as a felony that can lead to prison or deportation.

In another major voting case, the U.S. Supreme Court is due to issue an opinion soon on whether mail ballots must arrive by Election Day. That could immediately change the rules in 14 states that allow grace periods ranging from days to weeks if the ballots are postmarked by Election Day.

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Casper, who was nominated by Democratic President Barack Obama, is the chief judge for the U.S. District Court for the District of Massachusetts.

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