the downgrading of France's sovereign rating is “a big wake-up call”, according to an economist

The Moody's agency downgraded France's sovereign rating by one notch on Saturday.

“It’s quite a wake-up call” for France, estimates, Saturday December 14, on franceinfo Norbert Gaillard, economist, independent consultant and expert for Euromoney Country Risk while the rating agency Moody's downgrades France's sovereign rating by one notch. It is now established at Aa3.

The rating agency is concerned about the weight of the debt in France and the political instability the country is going through. In the Moody's report, “There are real concerns about a kind of vicious circle that could set in with a spiraling deficit, rising interest rates and increasing financing needs,” explains Norbert Gaillard. “All this, ultimately, could lead to a worsening of the budget deficit”he adds.

The economist believes that François Bayrou was a “visionary” by warning about the weight of the debt during the electoral campaigns of 2002 and 2007 in particular: “It’s a burden on future generations. He was absolutely right,” says Norbert Gaillard. “It’s rather reassuring” to see him at Matignon, he believes. But “it will be necessary to send clear signals from the government to the market very quickly. It will be necessary to very clearly indicate that the deficit will be absorbed during the year 2025”says the economist.