Sunday, May 28, 2023

"France Just Got Another Warning Over Its Credit Rating"

From Bloomberg via Yahoo Finance, May 27:

The outlook on France’s credit rating was reduced to negative from stable by Scope Ratings, raising questions about President Emmanuel Macron’s efforts to spur growth and reduce a crisis-swollen debt burden.

The Europe-based credit rating firm said it changed the outlook on its AA rating due to weakening public finances and implementation risks to the agenda for economic reforms.

The change comes after Fitch Ratings cut France to AA- from AA last month, also flagging high government debt and risks that political deadlock after the protests over pension reform could hamper future economic overhauls.

The rating actions are sharpening focus on challenges France faces to pare back a budget deficit that ballooned during Covid pandemic and has only decreased slowly as the government spent vast sums limiting energy prices.

While Scope is not among the major rating firms, it is recognized by the European Securities and Markets Authority and has applied for recognition in the European Central Bank’s credit assessment framework.

Standard & Poor’s could also take rating action on France a week from now, according to its calendar....