After “Fitch” lowered its score last month, France awaits Friday the decision of another credit rating agency, as Standard & Poor’s (S&P) may resort to punishing Paris for its management of state finances and the recent social crisis.
The US agency is supposed to announce its classification on Friday evening. Standard & Poor’s is one of three international credit rating agencies, along with Moody’s and Fitch.
Currently, S&P gives France a grade of “AA” on a scale of twenty degrees, topped by “AAA”, which is the best possible rating, and the last of which is “D”, which is synonymous with debt default. It may downgrade it to “AA-negative” but it may keep it unchanged.
The agency can proceed from its projections of likely growth in the medium term. This is currently “negative”, which means a possible downgrade.
French officials have been closely watching the agency’s analysis, fearing for their image as good managers and reformers since Emmanuel Macron assumed the presidency. A downgrade could be a setback for them.
The Ministry of Economy and Finance declined to comment in response to questions from AFP before the rating was published.
Reducing the deficit and accelerating the reduction of public debt
French Minister of Economy and Finance Bruno Le Maire confirmed on Wednesday that he met with the US agency to present the French “arguments” that he considers “convincing”.
“We will be steadfast in reforming our public finances, reducing the deficit and accelerating the reduction of public debt,” Le Maire told France Inter on Wednesday. He considered the French economic results “solid”.
For her part, Prime Minister Elizabeth Bourne confirmed Thursday during a visit to the city of Laval, “Whatever Standard & Poor’s decision, it does not change our determination to achieve our public financial goals.”
However, according to the numbers, the results of France’s performance appear to be worse than other countries classified in the same category, as noted by Fitch Agency, which downgraded the French rating at the end of April from “AA” to “AA-negative”.
It has the highest indebtedness among countries in the same category, with a public debt of about three thousand billion euros.
Fitch indicated that the expected public deficit for this year and the next is much higher than that of the countries included in the same classification, justifying its analysis by the social crisis resulting from reforming the pension system and the difficulties faced by the executive authority to implement other reforms.