22 September 2026 – French government bonds are under pressure as the government expects a higher deficit for 2026. On 25 September 2026, the heavily criticised EU safeguard measure on grain oriented electrical steel, GOES, enters into force. One point is conspicuously absent from the Commission’s reasoning: were slab imports by European producers taken into account, or ignored once again?
French Government Bonds Under Pressure: Risk Premiums Reach 14 Year High
Risk premiums on French government bonds rose to their highest level in around 14 years at the end of last week. The yield spread over ten year German government bonds exceeded 1.03 percentage points.
The reason is growing concern over France’s fiscal position and political uncertainty. The government now expects a higher deficit of 5.4 per cent of gross domestic product for 2026. At the same time, political resistance to necessary reforms and consolidation measures is increasing ahead of the presidential election in spring 2027. Weak growth and higher financing costs are making deficit reduction even more difficult.
The French government has so far failed to present a convincing strategy for reducing the deficit. It is therefore all the more remarkable that the European Union still allows France to set the direction on economic and trade policy issues.
EU Safeguard Measure on Electrical Steel Imports
On 25 September 2026, the heavily criticised EU safeguard measure on grain oriented electrical steel, GOES, under CN codes 7225 11 00 and 7226 11 00 enters into force. For the first time, it also covers a downstream product under Chapter 85, CN code 8504 90 13.
The legal basis for EU Safeguards Measures are Regulations (EU) 2015/478 and 2015/755, not the Steel Regulation. The measure operates through tariff quotas and price thresholds.
Were Slab Imports Ignored Again?
One issue that appears to have received little attention in the investigation, but could be significant, is the sharp increase in imports of input materials that may also have been used in GOES production.
After slab imports of alloy steel fell to a low in 2019 and 2020, they have increased significantly again in recent years, by more than 360 per cent compared with 2019. Whether European steel producers themselves may have imported GOES input material was, with a high degree of probability, not examined in the safeguard investigation.
The Commission has repeatedly ignored imports of semi-finished materials for products subject to trade protection measures in its investigations, to the benefit of domestic steel producers. Even explicit references to the substantial increase in slab imports, which reached record levels in 2025, were simply passed over without comment in Brussels.
Stainless Steel Slabs from Indonesia
A good example is the steadily increasing import of stainless steel slabs into Italy for the production of hot rolled and cold rolled flat steel products.
In 2025 alone, almost 300,000 tonnes of stainless steel slabs from Indonesia arrived there, while stainless steel coil and sheet were subject to high protective tariffs.
Imports of slabs of Indonesian origin also appear to be continuing this year. According to well-informed sources, a further 100,000 tonnes of stainless steel slabs have recently been ordered from Indonesia for the EU.
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