Counter-terrorism forces take to the streets, Louvre closes! France erupts in a new wave of protests over the weekend, with turmoil threatening to spread across Europe

France is facing a new wave of nationwide protests, with ongoing social unrest not only testing the country’s security apparatus but also significantly intensifying market concerns about French public finances and economic prospects.

According to media reports, as protests escalate into violent riots, the French government has urgently deployed 70,000 security personnel to maintain order and ordered curfews in several cities. President Macron admitted to flaws in handling last weekend's violent incidents and has postponed planned diplomatic trips to focus on managing the current domestic crisis.

The continued turmoil has taken a direct toll on financial markets and the broader economy. The yield spread between French and German 10-year government bonds has surged sharply, reaching its highest level since the eurozone debt crisis, while the latest data shows private sector economic activity has fallen below the expansion-contraction threshold, entering contraction territory.

Business and retail activities are also bearing the brunt, with many luxury stores and major attractions in Paris forced to close their doors. Business executives and local officials warn that a decline in tourism will hit upcoming holiday season sales hard and could cause tens of millions of euros in economic losses to the city government.

Market Warning and Economic Contraction

The unrest has exacerbated investor concerns over France’s public finances.

Although France narrowly avoided a downgrade from Moody's Ratings on Friday night, the country’s efforts to reduce the budget deficit before the 2027 election are facing severe challenges. As a key measure of bond risk, the 10-year yield spread between France and Germany, considered the region’s safe-haven asset, reached 178 basis points on Thursday, far above the level of 85 basis points at the beginning of September, touching levels seen during the eurozone debt crisis.

Additionally, macroeconomic data is sending out weak signals. The composite Purchasing Managers’ Index (PMI) compiled by S&P Global fell from 51.1 in the previous month to 48.4 in October, dropping below the 50 threshold, indicating that private sector economic activity has slipped into contraction.

Business Shutdowns and Hit to Consumption

The anticipation of further violence is causing widespread business disruptions.

In Paris, many retailers—including luxury boutiques—have boarded up windows and increased security, while some stores remain closed. The Louvre, Musée d'Orsay, and Picasso Museum—three top attractions—were closed on Saturday, and the Paris Saint-Germain vs. Lyon football match, originally scheduled for Paris, was also postponed.

Media reports indicate that the CEO of Breitling has warned that the company is bracing for an impact on holiday season sales as tourists avoid Paris.

According to reports, Paris Deputy Mayor Emmanuel Grégoire said the city was preparing for a prolonged situation potentially lasting weeks, with estimated losses for city hall reaching tens of millions of euros. He also noted on social media that there were signs protesters plan to converge on the capital on both this Saturday and next Saturday.

Security Heightened in Full Scale Response

To counter what has been dubbed “Act II” of the protests, the French government has upgraded security measures across the board.

French Interior Minister Laurent Nunez told reporters on Friday the government would deploy 70,000 security personnel, including elite counter-terrorism units. He blamed far-left groups for calls to violence on social media and emphasized the government’s zero-tolerance approach toward rioters, looters, and anyone engaging in violent acts (including far-left political groups).

The military will help guard sensitive sites, and helicopters, water cannons, as well as armored vehicles known as Centaurs, are on standby. Several cities, including Lyon, have issued protest bans and extended curfew hours for Saturday. On Thursday, Macron acknowledged the existence of “planning failures and unexpected factors” behind last weekend’s violence. He attributed the incitement of unrest to far-left groups.

Political Divide and Spillover Risks

With only six months remaining in his second term, Macron’s approval rating is at a low point.

The protests initially stemmed from public calls for improved public services and government action on high living costs. According to a Cluster 17 poll for L’Opinion, the movement still enjoys majority public support at 53%, though that figure has fallen by 4 percentage points. Meanwhile, as concerns over negative impacts grow, 59% of respondents now wish for a swift end to the protests—up 6 percentage points.

The polls also show that the violent unrest has benefited the far-right presidential frontrunner Marine Le Pen. She plans to gather thousands of supporters for her National Rally party congress in Orléans on Saturday. At the same time, thousands of counterprotesters—including left-wing figures and union leaders—began a march in downtown Orléans on Saturday morning local time.

Sentiment linked to social unrest is also spreading to other European countries. In Italy, student and youth demonstrations are expected in Milan and Rome over the weekend, and, following robberies and riots last weekend, the Italian government announced it would deploy troops in Milan. Protests are also expected in Belgium, while Albania is struggling to contain a second consecutive week of violent demonstrations over dissatisfaction with Prime Minister Edi Rama's rule.