The Standard & Poor’s rating agency maintains France’s rating “despite political uncertainty”

The largest American agency downgraded the rating in May. She now expects France to “gradually consolidate its public finances in the medium term” and “comply – with a delay – with the European budgetary framework”.

It is the third rating agency, and the largest, to give its opinion on French debt since October, after its competitors Fitch and Moody’s. These two had not downgraded the rating, but had issued a warning to the government by putting France under “negative outlook”. This Friday, November 29, Standard & Poor’s (S&P) chose not to change anything in its previous rating. The American agency justifies its decision by emphasizing that France remains “a balanced, open, rich and diversified economy”. “Despite political uncertainty”S&P expects France “gradually consolidates its public finances in the medium term” et “complies – with a deadline – with the European budgetary framework”. A few days before the European elections, on May 31, S&P downgraded France’s rating from “AA” to “AA-”, for only the third time in almost fifty years.

Antoine Armand, the Minister of Economy and Finance, reacted in the evening by press release: “By maintaining France’s rating, Standard and Poor’s demonstrates the credit granted to the government to reduce the deficit and restore our public finances. The agency, however, underlines the risk associated with political uncertainty which would call into question this trajectory.” The Barnier government interprets this decision as a validation of the trajectory of public finances presented at the end of October to the European Commission. This is the second validation in a few days, since on Tuesday, the Commission had already judged that the prospects for restructuring the accounts respected European rules and set a credible framework for reducing debt in the country which this year posted one of the highest deficits in Europe .

Le Pen raises the stakes

For the rest, the week was more than hectic on a budgetary and financial level. In Parliament first, where the ongoing examination of the social security financing bill for 2025, which is nearing its end, and that of the finance bill for next year, in the hands of the Senate after being rejected by the Assembly, could give rise to a major bargaining session, with serial concessions from the Barnier government to the parties that make up his coalition and to the far right, amounting to billions of euros. Without measures accepted so far to finance them, these gifts jeopardize the objective of increasing the public deficit from 6.1% of gross domestic product planned this year to 5% next year – an objective nevertheless repeated by Michel Barnier this Friday during a trip to Limoges. All this, punctuated by Marine Le Pen, who raises the stakes so that the deputies of the National Rally do not vote for censure, while they will have the opportunity three times between now and Christmas to bring down the government and with him, the budgetary texts currently being discussed.

This great political uncertainty had repercussions on the financial markets, where the week was marked by a certain excitement. A sign of investor distrust, on Tuesday, the rates at which France and Germany borrow 10 years (OAT) diverged to a level unknown since 2012, the period of the European sovereign debt crisis. The next day, briefly, this same French rate, for the first time, exceeded that of Greece. Quite a symbol, even if the latter is no longer in the same situation as ten years ago. “France is not Greece. It has a structure, solidity and economic liabilities which are not comparable with those of Greece.we explain at Bercy, before specifying: “Without being contemptuous.”