President Emmanuel Macron acknowledged "failures in anticipation and intelligence" following violent protests in France but rejected Interior Minister Laurent Nunez's resignation, the presidential palace said Monday.
The protests follow weeks of student demonstrations that included street violence, rocking the country six months before its next presidential election and increasing pressure due to a weak economy and surging debt.
Fears of tensions within Macron's fragile government regarding apparent security shortcomings – coming as the government needs to pass a crucial budget bill to rein in its finances – could further unsettle investors.
Over the weekend, hundreds of thousands protested what many describe as declining and dysfunctional public services, leaving citizens to fend for themselves amid cost-of-living pressures.
In many cities, including Paris, Marseille and Lyon, rioters quickly hijacked peaceful protests, leading to vandalism and chaos.
Intelligence failures
Interior Minister Nunez told France Inter radio Saturday that France deployed 60,000 police and other security forces but acknowledged it was not enough to control violent crowds in some cities.
Macron's presidential office, the Elysee, said Monday that Nunez, a former Paris police chief, offered his resignation to the president following the riots.
Macron refused, but urged Nunez to urgently develop new strategies "to end the barricades and looting," the Elysee said.
It added that Nunez also needed to "ensure transparency regarding the failures in forecasting and intelligence that led to the violence."
Justice Minister Gerald Darmanin, a longtime Macron ally, echoed the president's calls Monday, telling France 2 television that intelligence failures left the state vulnerable in the face of what he called "extreme-left" rioters the state had underestimated.
Cost-of-living issues were also prominent during numerous protests in other European countries, including Italy, Belgium and Albania, over the weekend. High fuel prices, largely attributed to the conflict involving Iran, added to the burden for many.
In France, violent groups torched a town hall, pillaged shops and covered buildings in graffiti Saturday as they clashed with police throughout the country.
Clashes also broke out in Paris and Marseille Sunday, with riot police intervening to prevent attempts to ransack businesses.
A slide in bond prices pushed France's 10-year yield up 8 basis points to 4.86%, while Germany's 10-year yield, the benchmark for the eurozone, was flat at 3.41%.
"The modest recovery in French spreads over the past week will be tested Monday," Jim Reid, a Deutsche Bank analyst, said in a note.
French shares were also among the worst performers on the European market Monday, with the CAC 40 falling 1.3% in early trading. Shares of French banks BNP Paribas, Societe Generale and Credit Agricole each fell about 2%.