Debt and deficit: France once again awaits its financial report

It's a judgment that Bercy is still awaiting with apprehension. A few days after the fall of the Bayrou government, which complicates the presentation of a new budget, the Fitch agency is due to announce on the evening of Friday, September 12, whether or not it will lower the financial rating assigned to French debt. The latter could lose its AA classification, " high or good ," to that of A, " upper average ."

France has already left the very exclusive club of countries receiving the highest ratings from the three major global agencies for nearly twelve years. A circle that now includes only a handful of countries: Australia, Canada, Denmark, Germany, Luxembourg, the Netherlands, Switzerland, Norway, Sweden, and Singapore.

In January 2012, Standard & Poor's Global (S&P) was the first of the three major agencies to downgrade France's rating, removing the top rating it had held since 1975. The announcement of this downgrade came as a shock. This was especially true as it came after Nicolas Sarkozy, then in the Élysée Palace, had described the triple-A rating as a " national treasure."

In May 2024, the American rating agency lowered France's rating by one notch, from "AA" to "AA-". France has since retained this rating with a " stable outlook ", meaning that the rating is not likely to be downgraded in the short term.

France lost its " AAA" rating from Moody's in November 2012. That year, France fell back a notch to Aa1 . And to make matters worse, Moody's then added a "negative outlook" to its rating, suggesting that a further downgrade could well occur. This came three years later, in September 2015, as the agency considered that France's growth prospects were too weak.

After several scares, a new downgrade was finally announced in December 2024, following the appointment of François Bayrou to Matignon. The American rating agency raised France's rating from Aa2 to Aa3 with a " stable outlook " to punish France's "political fragmentation ," " which could prevent significant fiscal consolidation ."

The American agency Fitch was the last of the three major agencies to strip France of its triple-A rating. This loss occurred in July 2013, which brought the country to the "AA+" category, the second-highest possible rating. Fitch justified this downgrade by the significant uncertainties weighing on the French economy. In the wake of this, in 2014, the agency lowered the rating by another notch. France then moved to "AA".

A decade later, in April 2023, Fitch again downgraded France by one more notch, to "AA-". Between the memory of the yellow vests and the demonstrations that accompanied the pension reform , the agency had estimated that social unrest risked penalizing growth, and therefore slowing down deficit reduction.

With its “AA-”, France remains among the “ high quality ” debts, A category to which the United Kingdom, Ireland, and Qatar also belong. But in the delicate context of the fall of its government, the lack of a majority and a budget, combined with the scale of its deficit, Bercy fears that the Fitch agency will downgrade France's sovereign rating from group AA, "high or good quality," to group A, "upper average quality."