France awaiting the rating of its debt by the S&P agency

Downgrading or maintaining France’s sovereign debt rating? The S&P (Standard and Poors) agency must give its verdict on Friday May 31. At the end of April, the two other agencies (Moody’s and Fitch) had not changed their rating. Can Paris hope for the same clemency from the American agency? One way to answer the question is to ask why our debt, although abysmal, more than 3,000 billion euros, escaped deterioration last time. Let us recall these ratings: Aa2 with stable outlook from Moody’s; AA- with stable outlook also from Fitch.

First, Moody’s and Fitch had highlighted the strengths of our economy with well-controlled inflation, the reduction in public aid for household and business energy expenditure… and the good performance of our banking system despite the difficult economic situation and interest rates. high interest. The glass is half full rather than half empty.

There are at least two other positive points which allowed the rating to be maintained. First of all, France’s capacity to raise taxes. This is important because it shows that the State is able to repay its debts. France’s membership in the euro zone is also a factor that should not be neglected. Investors who buy our debt are very sensitive to the quality and stability of our institutions. France’s “signature” remains good. We maintain the image of a country that repays on time. The hole is widening, of course, but we are honoring our debt payments.

In December, the S&P agency brandished the risk of a downgrade if our deficits did not decrease sufficiently. Since then, France has recorded a slippage in its deficit of 5.5% in relation to GDP compared to 4.9% anticipated. That makes a difference of around twenty billion euros, less. Until today, S&P rates us double A, the equivalent of 17/18 out of 20, but with a negative outlook. Until when ?