France spared Moody's ratings downgrade as it struggles with unrest
The agency said a deficit-cutting 2027 budget could steady financing costs and social tensions after markets had priced in a downgrade.
- On Friday, Moody maintained France's Aa3 credit rating, easing pressure on a government struggling with social unrest and strained finances.
- The agency's decision follows concerns over "fragmentation in parliament" and budget deficits, as The French government navigates political paralysis after a 2024 snap election.
- France's 10-year Bond yield hit 5.14%—the highest in 15 years on Thursday—while the 2027 budget targets a deficit of 5% versus 5.4% this year.
- Violent protests by student collectives and French CRS Officers escalated into riots last weekend, complicating the government's ability to pass the 2027 budget.
- With the presidential election approaching next year, Mike Bell, head of market strategy at RBC BlueBay Asset Management, warned further downgrades could "get more ugly.
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105 Articles
(London=Yonhap News) Correspondent Kim Ji-yeon = On the 23rd (local time), international credit rating agency Moody's raised France's sovereign credit rating to Aa3, contrary to financial market expectations, and the rating outlook...
The ten-year bonds of the French government show a return of more than 5%, more than Italy or Spain but less well rated. Paris now borrows more expensive than some French companies and will find it difficult to attract foreign investorsA respite. Contrary to the general expectations, Moody has not lowered Friday night the note of the French debt, now its appreciation to Aa3, that is of good quality, with a negative perspective. Prime Minister Sé…
The agency is confident that a budget will be approved to reduce the deficit by 2027
Sapo
Analysts expected a deterioration of the rating agency's rating, but Moody's seems to be starting from the hypothesis "that a budget for 2027 will be approved to reduce the deficit and that funding costs and social tensions will moderate in the coming months" in France.
The riots on the streets and on the stock exchange feed on each other. It closes a week of violent protests against the dear life and massive sales of government bonds: yields over 5% for the first time since 2002. They brake industry and investment, decreases the confidence of the companies. Moody's saves the rating: but the accounts have to get back in order and the protests come back. Today new demonstrations
Credit rating agency Moody’s is leaving France’s credit rating unchanged, despite the widespread unrest regarding high national debt, the political impasse, and massive street protests in France. The rating remains Aa3 with a negative outlook, which means a downgrade is possible.
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