AA / Paris / Ümit Dönmez
Standard & Poor’s (S&P) decided this Friday to downgrade France’s rating, going from “AA” to “AA-”. This decision comes nine days before the European elections, which adds additional pressure on the French Government.
In a statement, the agency explained that France’s budget deficit in 2023 had been significantly higher than expected, with projections suggesting it will reach 3.5% of gross domestic product (GDP) in 2027. “French public finances are subject to uncertainty,” S&P had warned for several months.
The Minister of Economy and Finance, Bruno Le Maire, reacted in Le Parisien, stressing that this deterioration in no way altered his “determination” to restore public finances. He tried to downplay the impact by comparing the new rating to a slight drop from “18 to 17 out of 20.” “Our debt easily finds buyers on the markets. France maintains a high quality signature,” he assured.
Thomas Cazenave, Minister for Public Accounts, expressed on X that this revision of the note only confirmed the need to continue efforts to restore public finances. On the other hand, criticism emerged from the opposition. The president of the Finance Committee, Éric Coquerel (LFI) affirmed that this deterioration would not change anything on the economic and financial level, but warned of potential budget cuts justified by this decision. Éric Ciotti, president of the Republicans (LR), for his part criticized the management of public finances by the current government.
In February, the French government revised its growth forecast downward for the current year, from 1.4% to 1%, a figure closer to economists’ estimates. Following this, he canceled 10 billion euros of budgetary appropriations by decree. In March, the Executive noted revenues well below expectations for the previous year, causing the public deficit to slip to 5.5% of gross domestic product (GDP), compared to a forecast of 4.9%. As a result, he announced an additional €10 billion in cuts, planned in the end of management bill at the end of the year.
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