Third evaluation of the semester for student France. Moody’s agency announced this Friday that it would maintain the French sovereign debt rating at Aa2, the equivalent of 18 out of 20 if we refer to the highest Aaa rating. But this rating is accompanied by a negative outlook, a sign of a lack of confidence in the country’s capacity toundertake fundamental reforms to reduce the deficit.
“It’s a warning. This means that the agency is waiting to see what the trajectory of public finances will be,” analyzes Anne-Sophie Alsif, chief economist at the BDO, to Le Parisien. “The message is Be careful, if you don’t do anything, we’ll downgrade next time. It’s a signal sent to the State,” adds Sylvain Bersinger, from the Asterès firm.
Two weeks ago it was the Fitch agency who had followed the same reasoning as his Wall Street colleague. As for Standard & Poor’s (S&P), which had lowered its rating a few months ago, it must submit its new copy on November 29. The government of Prime Minister Michel Barnier, entangled in uncertain budget discussions in the Assemblyis therefore not finished with the ballet of American agencies.
“A pretty nice sight”
“Very strong deterioration of public accounts, political instability and therefore difficulty in passing a budget, lack of medium-term visibility… There were a thousand arguments to downgrade France’s rating. Just downgrading the perspective is a pretty nice vision,” says Mathieu Plane, deputy director of the OFCE. For Anne-Sophie Alsif, “it’s giving the government a chance. Moody’s notes that there is a desire to reduce debt without affecting growth too much, and therefore without being recessive. »
Public finances have largely gone adrift in recent months, leading the European Union to take action against France an excessive deficit procedure. “Everyone is starting to gnash their teeth. A deficit of 6% of GDP cannot last forever,” warns the Asterès cabinet. A message heard by the government but the Finance bill, which gives headaches to the executive as the Assembly is fragmented, targets 60 billion euros in savings from next year. With a stated objective of returning below the sacrosanct 3% in 2029.
However, we should not be alarmed, assure the three economists in unison: France is not at all the Greece ruined by the crisis from 2008. “But the slope will lead us there within around fifteen years. “years, you have to work on not being there,” warns Sylvain Bersinger. The latter takes as an indicator the spread. This thermometer of the financial health of States measures the difference between the rate at which a European country borrows over ten years and that of Germany. “It comes down to comparing yourself to the best in class. »
And if it has been increasing in recent months, this is not linked to the lower grades in the French bulletin. “It increased at the time of dissolution (of the National Assembly). Because of the political uncertainty arising from this decision,” supports Mathieu Plane. Which reassures: “We have savings, assets, we know how to raise taxes. We have other fundamentals than our deficit which make France quite solid. »
If there is no cause for alarm, it is because French debt remains attractive for creditors, even if they make us pay a little more for it from now on. “We are too, because there is a lot of liquidity to invest and fewer and fewer countries in which to invest. We may have a debt problem, but in this island of disasters that is the world, with geopolitical problems, armed conflicts, trade wars, we are less worse than the others,” concludes Anne-Sophie Alsif.