The sanction was expected, but not so soon. The rating agency S&P Global Ratings, one of the most influential in the world, issued a warning to France on Friday, lowering the country’s grade one notch, to A+. An announcement that surprised due to its timing, when the US agency was due to rule on the French case only on November 28.
For S&P, “uncertainty over French public finances” remains “high” despite “the presentation this week of the draft budget for 2026.” expected”.
These measures are all the more difficult to adopt as “France is going through its most serious political instability since the founding of the Fifth Republic in 1958,” recalls S&P. Furthermore, the suspension of the reform, although it provides stability, leads to a worsening of the situation of public accounts.
“A rare event”
For the moment, S&P’s decision to lower the French rating has not had a significant effect on the level of the rates at which the country borrows, as the markets had already anticipated this sanction. However, it is a new slap in the face for Paris, which already saw its “double A” withdrawn by the Fitch agency a few weeks ago, and could receive the same slap on Friday, when Moody’s reviews the French rating.
But it is above all the hasty reaction of S&P that screams: “The calendar means that the warning remains a serious warning. What has just happened is not insignificant,” estimates Wilfrid Galand, strategic director of Montpensier-Arbevel.
Also remember that an agency’s decision to pre-review your rating “is extremely rare.” “Since 2013, the European authorities have imposed a calendar on the rating agencies for reasons of financial stability and can only deviate from it if they consider it to be an important event,” Wilfrid Galand further notes. In recent years, rating agencies have been rushed, for example, because of the war in Ukraine (revised rating of Russian and Ukrainian debt), the Covid-19 pandemic, the Brexit vote in the United Kingdom in 2016 or even the closure of the United States in 2011.
Source: BFM TV
