PARIS (Reuters) – Fitch lowered France’s long -term credit note on Friday to A+, against AA- previously, the rating agency stressing that the increase in public debt limits the country’s ability to react to new shocks without aggravating the situation of public finances.
This decision comes after the reversal Monday of François Bayrou’s government by deputies on Monday, precisely on the issue of France’s debt, which represented more than 113% of GDP last year.
The Minister of the Resignment Economy, Eric Lombard, said “to take note” of Fitch’s decision, saying it “motivated by the situation of our public finances and political uncertainty, despite the solidity of the French economy”.
“The new Prime Minister (Sébastien Lecornu) has already committed the consultation of the political forces represented in Parliament, with a view to adopting a budget for the nation and to continue the efforts to restore our public finances,” he wrote on the X platform.
The fall of François Bayrou has accentuated political chaos in France, with a fifth Prime Minister in just over two years, and strengthened the uncertainties around the draft budget for next year while the former head of government was largely disowned for his desire to achieve more than 40 billion euros in savings.
The “Spread” or yield gap between the German Bund and the French OAT at 10 years old, which makes it possible to measure the risk premium associated with French debt, has reached this week a higher since March 2025. The rate of French loans at 10 years is now almost at the level of its Italian equivalent.
However, an uncertainty factor was lifted this summer for France, as for other European countries, with the trade agreement concluded by the European Union with the United States of Donald Trump on the level of American customs duties.
After Fitch, the two other major rating agencies will make their new opinion on the French situation this fall: October 24 for Moody’s, which currently notes France to AA3 with stable perspective, then November 28 for Standard & Poor’s, for the moment in Aa- with negative perspective.
(Leigh Thomas, Bertrand Boucey and Tangi Salaün)
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