What will be the political consequences if Standard & Poor’s lowers France’s rating?


Arthur de Laborde / Photo credit: Joël SAGET / AFP

The American agency Standard and Poor’s will give its verdict on France’s rating on Friday evening, which could drop from AA to AA-. A further deterioration in the French rating which frightens Bercy, which is also doing its utmost to avoid such a scenario.

Pressure is mounting on the government as Standard and Poor’s decision approaches. After the closing of the Wall Street Stock Exchange, around 11 p.m., the American rating agency will deliver its verdict on the economic health of France. The executive fears a downgrading of the rating, which, after that already recorded at the end of April by Fitch, would be a real blow with an immediate political impact.

Avoid further degradation

The government is trying at all costs to avoid further deterioration and has been active behind the scenes for several days. Unprecedentedly, Prime Minister Elisabeth Borne herself said that there had been “very close” discussions with Standard & Poor’s. The Minister of the Economy Bruno Le Maire notably received representatives of the agency to give them detailed explanations and defend the French debt reduction strategy.

If the rating were to be lowered, a deterioration would be bad news for the executive, which regularly highlights its economic credibility and its budgetary seriousness. This could undermine investor confidence and increase the rates at which we borrow on the markets. What offer multiple angles of attack to the opposition whether they are favorable or not, on the merits, to a consolidation of public accounts.

But once the blows have passed, “we can rely on this symbol to justify the need to tighten the purse strings in the 2024 budget”, relativizes a Macronie executive.



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