France has received a new warning from a credit rating agency about its financial situation. Europe’s smallest credit rating agency Scope has downgraded the so-called outlook for France’s creditworthiness from stable to negative. This means that Scope could downgrade its rating on the French rating, mainly due to concerns about high public debt.
A month ago, the largest agency Fitch announced an outright downgrade of France’s credit rating from AA to AA-. Fitch also highlighted high debts and doubts about French President Emmanuel Macron’s plans to revive the economy. Social unrest in France over the increase in the retirement age also plays a role, as does the risk of an impasse in French politics surrounding Macron’s plans.
Huge national debt
France is dealing with a very high national debt due to large public spending to counter the corona crisis. Paris has also spent a lot of money to protect families from the sharp increase in energy prices due to the war in Ukraine. Macron now wants the economy to grow stronger, while the debt must be reduced.
Scope is not part of the three major credit rating agencies Fitch, Moody’s and Standard & Poor’s (S&P), but is an agency recognized by European authorities. S&P was due to release the French credit rating news next week.
Source: BNR
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