Fitch downgrades France's rating: foreign press says "loss of double A is justified"

“The dreaded verdict came in Friday evening, at the close of trading in the United States,” announced La Vanguardia . On September 12, the American agency Fitch downgraded the rating assigned to French public debt, moving from AA- to A+.

“The measure is a consequence of French political instability, characterized by the fall of a second government in less than a year, and the country's manifest inability to clean up its public finances.” But it is also a first for a country that has never before received such a poor rating.

“According to several experts, the symbolic loss of the double A rating is justified ,” analyzes the Catalan centrist daily. According to it, it was “no longer very logical to see France retain a higher rating than other European countries like Spain, Portugal or Italy.” Indeed, “the latter were rated lower, while their budgetary rigor now allows them to repay their debt at lower interest rates.”

But above all, the news highlights the many difficulties the country faces. “France’s political malaise has pushed interest rates to levels close to those reached during the European debt crisis more than a decade ago,” explains The Financial Times .

The British business newspaper points out that the interest rate on ten-year government bonds “rose to 3.6% a few days before François Bayrou’s resignation, before falling back to 3.49%.” Last year, it stood at 2.85%, which shows that investors are still demanding higher interest rates to hold French debt.

However, this debt continues to increase, notes the American economic title The Wall Street Journal . It now stands at 114% of the gross domestic product, making it a significant expenditure item for the French government. In fact, “the country spends more on repaying its debt than on its defense.” This debt problem is not new, but it has worsened recently. “The last time Fitch estimated that France was less likely to pay its debt on time was in April 2023. But the agency also issued a negative opinion on France in October 2024.”

At the same time, the public deficit is also increasing. “After years of extravagant public spending and declining tax revenues,” it has reached more than 168 billion euros, or about 5.8% of gross domestic product, states The New York Times . It is therefore “well above the 3% [of GDP] limit to be respected in the eurozone,” notes the progressive New York daily. In 2024, “the government collected 1.5 trillion euros in revenue, but it also spent 1.67 trillion euros to finance national and local administrations, as well as France’s generous social system.”

Faced with this observation, La Vanguardia wonders whether the downgrade of France's rating will have a political impact on Sébastien Lecornu's negotiations to form a new government. Lecornu intends to implement an austerity plan that neither the far right nor the left seem to want. And the discussions were shaping up to be difficult even before "the markets demanded more discipline" from France.

This situation worries Die Zeit , for whom the French crisis could have consequences throughout Europe. “A country that is at the heart of the eurozone is now the focus of all attention, this is different from what happened 15 years ago, when Greece was saved,” notes the German left-wing newspaper.

It should be possible to avoid a general financial crisis, as some instruments have been added to the European Central Bank's (ECB) range to help countries in difficulty. But "if France fails to resolve its problems in the future, the financial stability of the eurozone will depend even more on Germany."

It remains to be seen what rating agencies Moody's and S&P Global will have to say about this. The latter are due to publish their own rankings in October and November.