The degraded situation of public finances puts France at risk of “progressive asphyxiation”, the governor of the Bank of France warned on Saturday, in an interview published by La Croix, a day after Moody’s maintained the sovereign rating, but with a negative outlook.
The governor was questioned about the warning issued Friday by rating agency Moody’s, which maintained France’s sovereign rating but downgraded its outlook from “stable” to “negative.”
Moody’s explained that it wanted to reflect “the growing risks of a weakening of institutions and governance in France, as well as a partial rollback of structural reforms.”
It underlines the risk of a “lasting fragmentation of the country’s political landscape”, which can “harm the functioning of institutions”, while governments “continue to struggle to obtain a parliamentary majority”.
François Villeroy de Galhau also warned of the risk “due to contagion” of “an increase in the cost of loans to households – real estate credit – and to companies” in France.
The maintenance of the Aa3 rating (good quality debt) by Moody’s “says that our country retains its strengths”, however stressed the governor of the Bank of France, who expects growth of at least 0.7% this year.
When asked about the Zucman tax, which is being debated in Parliament on Saturday as part of the 2026 budget review, he advocated for “those who have the most” to pay “their fair share of the tax.”
In mid-September, François Villeroy de Galhau had already declared himself in favor of “tax optimization measures for high net worth”, so that the recovery of public finances “is considered fair”.
Ten days ago, the governor of the Bank of France called on French political parties to make “commitments,” saying he had had enough of “political waste.”
Source: BFM TV
