Summary
Moody’s downgraded France’s credit rating from “Aa2” to “Aa3,” citing “political fragmentation” and limited prospects for addressing the country’s rising fiscal deficits.
The downgrade follows similar moves by S&P and Fitch and comes as Emmanuel Macron appointed Francois Bayrou as France’s fourth prime minister this year.
Bayrou replaces Michel Barnier, who was ousted after a no-confidence vote over his proposal to cut €60 billion in government spending.
Bayrou now faces the challenge of navigating a divided legislature to draft a 2025 budget and address the country’s economic instability.
Covid happened. It hit most countries like that. Now he’s trying to balance things again, against intense opposition
The root cause is not recent. The french have been overspending for decades. Look at the debt to GDP ratio over time.