The economist, emeritus research director at the CNRS, was the guest of “8:30 a.m. franceinfo”, Friday June 2, 2023.
“I expect degradation” of the rating of France by S&P, declared Friday, June 2 on franceinfo the economist Elie Cohen, director of research at the CNRS. This American rating agency must deliver its verdict in the evening. In April, its competitor Fitch has already lowered France’s rating to “AA-“. She considered, among other things, the political and social context represented a risk for Emmanuel Macron’s reform program.
The government does not show “a great capacity to reform” according to Elie Cohen
“We are going to degrade” For “basically three reasons”, explains Elie Cohen. First, because “the French government, over the long term, does not show a great capacity to control public finances and to bring down debts and deficits in the long term”. “The second thing is that the government does not show a very great capacity for reform either.despite the pension reform.
“The Third Reason”Finally, “it is that in the short term, we continue to have higher levels of deficit and debt than those of our neighbors and that the prospect of a return below 3% is, if I understand correctly, 2027 “. Should we expect an impact on the daily life of the French, in the event that his prognosis is good? “I do not believe”he replies.
“France has a solid state, a well-functioning tax system”
The risk, for France, is to have to borrow more expensively. There too, he “don’t believe” that’s going to happen. “Let’s be serious for two minutes, does anyone believe that France risks being insolvent?”he says. “France has a solid state, a tax system that works well and citizens who pay their taxes ruby on the nail”, he insists.
He recalls that “we are in free, open economies and investors have the right to take or not take into consideration the signals given to them by the rating agencies”. “Besides, what happened after the previous degradation [par Fitch] ? Has this had an impact on the placement of French debt? No way. Has the situation in France deteriorated compared to Germany? No way”he points out.
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Find the entire “8:30 am franceinfo” of Friday June 2, 2023: