The French bonds and stocks came under new pressure today after her party Marine Le Pen (National Rally) has indicated that it will support the motion of censure against the government of the French Prime Minister Michel Barnieraccording to the Bloomberg agency.

The spread between 10-year French and German bonds widened eight basis points on the day to 89 basis points, nearing the highest level since 2012 and on track for the biggest widening since June. The CAC 40 is 0.25% lower, while the euro is down as much as more than 1%.

It is noted that Barnier used a constitutional tool to approve parts of his unpopular social security bill without a parliamentary vote, after days of negotiations. While he offered a last-minute compromise to Le Pen, pledging not to cut drug reimbursements, it was not enough to win the support of the National Alarm.

“The main scenario now is for the Barnier government to fall”said Benoit Gerard, rate strategist at Natixis SA, adding that the new equilibrium level for the spread is around 100 basis points. “The lack of governability is now clearer than before.”

The political row threatens to derail the government’s efforts to reduce the ballooning deficit, which is forecast to widen to 6.1% of GDP this year, putting a heavy burden on French assets.

French bonds have underperformed euro zone bonds since French President Emmanuel Macron rattled markets by calling a snap election in June, with the risk premium on the 10-year bond now trading near levels last seen during eurozone debt crisis.

Yields surpassed those of Greek debt at one point last week. The next milestone would be to close the gap with Italy,

“Whether the government falls or not, its problems of France are bigger than this issue”said Robert Dishner, senior portfolio manager at Neuberger Berman, in an interview with Bloomberg TV.

Meanwhile, there are growing signs that the political crisis is weighing on the single currency’s prospects. The euro fell as much as 1.1% to $1.0462.

Barnier’s original plan, which was welcomed by investors, included spending cuts of 60 billion euros. euros and tax increases to reduce the deficit to 5% of GDP next year. But Marine Le Pen’s party is demanding improvements to Barnier’s budget, including plans to raise electricity taxes, as well as measures to curb pension spending.