2023-04-28 21:40:16
In its statement, the organization believes that the movement against pension reform increases the risk that the country will not be able to reduce its debt.
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Should France be worried about its ability to borrow? The rating agency Fitch lowered the country’s rating by one notch on Friday 28 April. This goes from AA to AA-. A decision that it justifies in particular by the social tensions around the pension reform and the prospects for growth lower than hoped.
Fitch “underestimates the consequences of the reforms”in particular those of pensions, reacted the Minister of the Economy Bruno Le Maire, regretting “pessimistic appreciation” of American business. He recalls in a press release “total determination” of the government “to restore the public accounts within the next four years”.
A rating equivalent to that of the United Kingdom
“Political stalemate and (sometimes violent) social unrest pose a risk to Macron’s reform agenda and could create pressure for more expansionary fiscal policy or a reversal of previous reforms”writes the rating agency in a press release (in English).
However, these criteria are not the main ones put forward by Fitch, which points above all to the “fiscal deficit” of France, its expenditure, its debt ratio and the increasing interest rate at which it borrows.
As explained the Ministry of Economy, the agency ratings assess the risk for borrowers that a State (but also a company or a community) does not repay the debt it contracts. Now rated AA-, the French debt is moving away from that of Germany (AAA, the best rating), but remains at the level of countries such as the United Kingdom, Belgium, South Korea or Qatar. Fitch also judges that the French debt has a “perspective stable”.
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