France’s credit rating would be “under pressure” if the country “fails to reduce its significant public deficit,” the credit agency S&P Global warned on Monday, estimating that the new Assembly “would complicate policy formulation.”
Responsible like its counterparts Fitch and Moody’s for assessing countries’ ability to repay their sovereign debt, the American agency S&P Global had downgraded France’s rating from third level “AA” to fourth level “AA-” at the end of May, a few months after the announcement of a public deficit much higher than expected.
At the end of the vote, neither the New Popular Front (left, around 190 seats), nor the presidential camp (around 160 seats), nor the National Rally and its allies (far right, more than 140 seats) obtained an absolute majority, and all are far from the 289 deputies required.
No significant measures
For S&P, the vote “will likely complicate policymaking” and “create uncertainty about the details of France’s economic and fiscal policy strategy” in the coming months.
The 2025 budget, which is due to be drawn up in early autumn, “will give an indication of the new government’s willingness to reduce France’s large budget deficits and respect EU budgetary rules,” he warned.
But the agency believes that the government that emerges from the negotiations “will have difficulties in implementing significant political measures” because it is under the “persistent” threat of censorship.
Source: BFM TV
