Un mois après la sanction de l’agence de notation Fitch, la pressure monte sur le gouvernement français qui s’active pour convaincre du sérieux de sa trajectoire budgetaire à l’approche du verdict de l’agence de notation financière Standard and Poor’s (S&P ) next Friday.
Questioned on this issue on Sunday morning by Radio J, Prime Minister Elisabeth Borne indicated that “there were detailed explanations” from Economy Minister “Bruno Le Maire to Standard and Poor’s about everything we do to control our public finances.”
These “very close discussions”, in the words of Ms Borne, come at a time when the executive is struggling to turn the page on pension reform, which has illustrated the difficulties in passing legislation in Parliament, at the same time that it has turned the issue into a strong social debate. protests
rating at half mast
Fitch, in downgrading France’s rating one notch on April 28 to “AA-“, had justified its decision in particular by a “political stalemate” that was likely to complicate the government’s task in its desire for reforms, or even encourage the expense
According to this rating agency, the current stagnation could “create pressure for a more expansive fiscal policy or a reversal of previous reforms.”
After reaching 4.7% of gross domestic product (GDP) in 2022, the French public deficit should increase slightly this year to 4.9%, before gradually decreasing from 2024, anticipates the Government in its stability program presented in April, which bets on a return to the European budget nails in 2027. Public debt is close to 3,000 million euros.
On Friday it was the Scope rating agency, less closely watched than Fitch, Moody’s and S&P, which downgraded the country’s rating outlook to “negative”, which means a possible future downgrade.
Currently at “AA” or the third highest level on its grid, Scope could lower this rating “within 12 to 18 months.”
Among the risks weighing on French finances, the agency noted that “economic dynamics slowed down markedly in the second half of 2022.” She was also not convinced of the deficit and public debt reduction trajectory, due to a “bad track record in terms of fiscal consolidation, a growing interest burden on the debt, and risks linked to the implementation of the reform program.”
These risks are linked to “the absence of a majority in Parliament” and to “sociopolitical protests”, in particular against the pension reform, he explained.
A new day of mobilization against this reform is scheduled for June 6, two days before the National Assembly examines a bill presented by the independent group Liot and which sought to repeal the retirement age at 64 years.
“We will do everything possible so that this debate does not take place,” however, assumed the Secretary of State in charge of Children Charlotte Caubel, while the power seeks to use article 40 of the Constitution, according to which the initiatives of parliamentarians they are not admissible. if they imply an increase in public charges.
Although this had no impact on the country’s financing capacity, the warning from the two rating agencies is not good news for the government, which regularly highlights its economic credibility and budget seriousness in the face of the opposition. Hence the efforts made to avoid a deterioration in the rating of S&P on Friday, whose outlook is already “negative”.
On Tuesday, the delegation of Borne and Le Maire announced to AFP an additional freeze of 1% of the credits of the 2023 budget to maintain the trajectory in terms of public finances.
Following Fitch’s decision, the minister also assured that France will continue with the reforms, criticizing a “pessimistic assessment” by the rating agency.
Source: BFM TV
