Standard & Poor’s does not downgrade France’s rating, maintained at “AA”

By John Timsit

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Bercy avoids the sanction. The Ministry of Finance managed to convince the New York agency of its control of the public debt and its reformist voluntarism.

It was the last deadline on Bercy’s agenda this year. Friday midday, Bruno Le Maire heaved a sigh of relief when he received the information discreetly. This was made public late Friday evening: Standard & Poor’s (S&P), the largest rating agency, which, like its competitors Moody’s and Fitch, esses the solidity of government debts, has not downgraded France’s rating. This is maintained at “AA” with a negative outlook. “This decision is consistent with the government’s choices in terms of public finances. More than ever, we remain determined to reduce public spending and accelerate France’s debt reduction. Our independence and respect for our national and European commitments are at stake.”commented Bruno Le Maire on Friday evening.

It must be said that the Minister of the Economy had spared no effort in recent weeks to convince representatives of New York society of the country’s budgetary seriousness, and of the government’s reformist voluntarism. Surrounded by teams from Agence France Trésor, the department of the ministry responsible for debt, and economists from the Treasury, the boss of Bercy then received in his offices the S&P team dedicated to France.

Debt at 112% of GDP

A few days ago, Bruno Le Maire’s entourage was reuring at the Figaro : “We can talk about the level of ambition of our public finance objectives, but what matters for the agencies is the fact that we are meeting these objectives. But we do it. In 2023, we will keep our commitment of a deficit of 4.9% of GDP and, in 2024, we will be, as announced, at 4.4%..” Black point, however: the control of public spending. If the issue was not the priority of the 2024 budget, Prime Minister Élisabeth Borne promised cuts for the 2025 finance law. A project has already been launched to find 12 billion euros in savings perennial.

While France is particularly exposed due to a debt measured at 112% of GDP, bearing the brunt of the explosion in rates, and it is preparing to raise the historic amount of 285 billion euros in 2024. on the markets, the rating agencies nevertheless continue to trust it to control its public spending. In October, the Moody’s agency maintained the country’s rating at “Aa2”, one of the best possible, maintaining a stable outlook. A few days later, it was the turn of the Fitch agency to maintain France’s rating at “AA-”, six months after having downgraded it.

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