Good news, but for how long? On the evening of Friday October 27, there was a sigh of relief in the corridors of Bercy: Fitch, one of the three main agencies responsible for assessing the solvency of the French State, has not issued an opinion negative. She reaffirmed France’s rating, which she had lowered by one notch in April, to AA – with a stable outlook; not without specifying in a press release that “public finances, and in particular the high level of public debt”constitute ” a weakness “.
The agency also points out “the risk that unspecified savings will not be realized”and questions the 12 billion euros in annual savings that the Ministry of Finance promises from 2025, when the country could face “higher spending than expected on energy or health subsidies”. “I take note of Fitch’s decision”reacted the Minister of the Economy, Bruno Le Maire, ensuring that he remained “totally determined to restore France’s public finances”.
A week ago, on October 20, Paris had already escaped the vindictiveness of another agency: Moody’s, which had maintained France’s rating at Aa2, one of the best possible, with a stable outlook. A sign of “the credibility of the French signature”according to Bruno Le Maire.
While the debt exceeded the symbolic threshold of 3,000 billion euros in the first quarter, and should represent, as this year, 109.7% of gross domestic product (GDP) in 2024, the government is committed to reducing the public deficit below 3% of GDP in 2027, at 2.7%. The 2024 finance bill (PLF), the first part of which passed first reading using 49.3 on October 25, two days before Moody’s decision, forecasts a deficit of 4.4% next year , compared to 4.9% expected this year.
If the agencies have been lenient, it is because the government has so far succeeded in convincing them. “They were able to create enough confidence on the trajectory. The agencies “bought” Bercy’s forecasts », estimates Ludovic Subran, chief economist at Allianz. France also benefited from the international comparison: Italy saw its interest rates jump after its deficit slipped, and Germany could end the year in recession.
Pressure on the executive power
In April, the Fitch agency downgraded the French debt not only because of its doubts about the debt reduction trajectory, but also “the political impasse and [des] social movements » after the adoption of the pension reform by 49.3.
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