While the adoption of France's 2025 budget is the subject of intense political discussions, the S&P rating agency decided this Friday, November 29 to maintain France's debt rating, an indicator scrutinized by operators financiers when they lend money to France. “Despite political uncertainty, we expect France to comply, with a delay, with the European budgetary framework and to gradually consolidate its public finances in the medium term,” the American agency said in a press release.
Last May, S&P lowered the French rating by one notch. As recalled byAgence France PresseMoody's and Fitch, the two other major rating agencies, had maintained the French rating at its previous level in October, while attaching a negative outlook.
A 2025 budget very difficult to vote on
This decision comes at a time when Michel Barnier's government is struggling to bring together a majority of deputies to vote on its budget or, failing that, to avoid censoring the government team in the event of recourse to article 49-3.
However, the Prime Minister recently agreed not to increase a tax on electricity beyond its pre-tariff shield level and not to reduce reductions in employer contributions on low-wage workers. These cancellations of measures had been desired by the National Rally, which had made it a condition of not censoring the government of Michel Barnier during the vote on the budgets for 2025 (the State budget and that of Social Security).
Despite everything, the risk remains. The leader of the Rally, Marine Le Pen, however, did not seem willing on Friday to give up censoring the government next week, accusing it of concessions “not financed by structural economies” and of “precipitate the financial crisis”.
At the end of 2e quarter, French debt amounted to 112% of GDP, a total which has increased significantly since the Covid-19 crisis and which has struggled to come down since.
France
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