The French Government confirmed this Saturday that the American financial rating agency Moody’s downgraded the French sovereign debt rating by one notch, from Aa2 to Aa3, leaving the country three steps away from the highest rating.
The announcement of this evaluation comes a few hours after the French president, Emmanuel Macron, nominate his third prime minister this 2024, the centrist François Bayrou, as a way out of the political crisis and replacing the ephemeral Michel Barnier.
“Moody’s agency announced the change of France’s rating emphasizing the effects that recent parliamentary episodes and current uncertainty have on the improvement of our public accounts,” the Ministry of Finance said in a statement.
In the other two large global rating agencies, Standard & Poor’s and Fitch, the sovereign debt rating is at the same level as that of Moody’s. The three agencies consider the country’s financial reliability “high”, although a little far from excellent quality.
France is experiencing a second half of this year of strong political instability which has resulted in the fall of Michel Barnier’s conservative government due to a motion of censure on December 4, which lasted only three months and was unable to approve a new budget for 2025.
The fall of the long-term note may affect the country’s public finances as investors in French debt may begin to demand a higher interest rate to lend money to the country.
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