France’s finance minister suggested that a cornerstone of the European economy might need help from the International Monetary Fund if a political and debt crisis were not addressed.

The prospect that France's minority government could collapse soon triggered a sharp selloff in French stocks and bonds on Tuesday, pushing political risks from the euro zone's second biggest economy back to the forefront of investors' minds.

French borrowing costs rose to their highest since March and stocks sold off for a second day on Tuesday, as investors reacted to the prospect of a government collapse as soon as next month. Prime Minister François Bayrou on Monday called a confidence vote for September 8 over his deficit-cutting budget proposals.