Counterterrorism units deployed on the streets, the Louvre closed! A new wave of protests erupted in France over the weekend, and the flames of unrest threaten to spread across Europe.

France is facing a new wave of nationwide protests, and the ongoing social unrest is not only testing the country's security defenses but also significantly heightening market concerns about France's public finances and economic outlook. According to media reports, as the protests escalated into violent riots, the French government urgently deployed 70,000 security personnel to maintain order and ordered curfews in some cities. French President Macron acknowledged mistakes in handling last weekend's violence and has postponed a previously scheduled diplomatic trip to focus on the current domestic crisis. The ongoing unrest has directly hit financial markets and the macroeconomy. The spread between French and German 10-year government bond yields has surged sharply, reaching its highest level since the eurozone debt crisis, while the latest data show that private-sector business activity has fallen below the boom-or-bust threshold and entered contraction territory. Commercial and retail activity has also borne the brunt, with multiple luxury stores and major attractions in Paris forced to close. Corporate executives and local officials warned that the loss of tourists will deal a heavy blow to sales in the upcoming holiday season and cause economic losses to the city of up to tens of millions of euros. Market Alarm and Economic Contraction The unrest has intensified investors' concerns about France's public finances. Although France narrowly avoided a rating downgrade by Moody's Corporation (Moody's Ratings, MCO.US) on Friday evening, the country's efforts to reduce its budget deficit before the 2027 election are facing severe challenges. As a key indicator of bond risk, the spread between French and German 10-year government bond yieldswith Germany serving as the region's safe-haven assetreached 178 basis points on Thursday, far above the 85 basis points in early September and touching a level not seen since the eurozone debt crisis. In addition, macroeconomic data have also sent weak signals. The composite Purchasing Managers' Index (PMI) compiled by S&P Global, Inc. (S&P Global, SPGI.US) fell to 48.4 in October from 51.1 last month, dropping below the 50 boom-or-bust threshold, indicating that private-sector business activity has fallen into contraction. Business Shutdowns and Consumer Shock Expectations of renewed violence are forcing business activity to halt on a large scale. In Paris, shops including many luxury boutiques have boarded up their windows and added security personnel, with some stores choosing to remain closed. The Louvre, the Muse d'Orsay and the Picasso Museumthree major popular attractionswere closed on Saturday, and the football match between Paris Saint-Germain and Lyon scheduled to be held in Paris was also postponed. According to media reports, the CEO of Breitling warned that the company is preparing for a hit to holiday-season sales as tourists stay away from Paris. According to reports, Paris Mayor Emmanuel Grgoire said the city government is preparing for a prolonged situation lasting several weeks and estimated that losses for City Hall could reach tens of millions of euros. In addition, he noted on social media that there are signs that rioters plan to gather in the capital this Saturday and next Saturday. Security Tightened and on High Alert In response to the protests dubbed "Acte II," the French government has fully upgraded security measures. French Interior Minister Laurent Nunez told reporters on Friday that the government will deploy 70,000 security personnel, including elite counterterrorism units. He blamed calls for violence on social media on the far left and stressed that the government will make no concessions to rioters, looters, or anyone committing violent acts, including far-left political groups. The military will help guard sensitive buildings, and helicopters, water cannons and armored vehicles known as Centaurs are also on standby. Some cities, including Lyon, issued protest bans on Saturday and extended curfew hours. Macron acknowledged on Thursday that there were "planning failures and unexpected factors" behind last weekend's violence. He blamed inflammatory behavior on extreme left-wing groups. Political Polarization and Spillover Risks Macron, who has six months left in his second term, is currently at a low point in approval ratings. The protests initially stemmed from public demands for improved public services and government intervention in the high cost of living. According to a poll conducted by Cluster 17 for L'Opinion, the movement still enjoys majority public support at 53%, but that support has fallen by 4 percentage points. At the same time, as concerns about negative effects intensify, 59% of respondents want the protests to end quickly, up 6 percentage points. The poll also shows that the violence has benefited far-right candidate Marine Le Pen, the front-runner in next year's presidential election. She plans to gather thousands of supporters in Orlans on Saturday for her National Rally party conference. Meanwhile, thousands of opponents, including left-wing figures and union leaders, began a protest march in central Orlans on Saturday morning local time. The mood of social unrest is also spreading across many European countries. In Italy, student and youth demonstrations are expected in Milan and Rome over the weekend, and after looting and riots last weekend, the Italian government said it will deploy troops in Milan. Protests are also expected in Belgium, while Albania is grappling with a second consecutive week of violent demonstrations sparked by dissatisfaction with Prime Minister Edi Rama's rule. This article is reposted from "Wallstreetcn," author: Ye Zhen, GMTEight editor: Wang Qiujia.