Solid … for now. The rating agency Moody’s on Friday confirmed the rating of the financial solvency of France to “Aa1″ and maintained its “negative” outlook. However, it suggested that it could lower it later, she has announced in a statement.
Moody’s pointed out that the credit rating of France remained solid despite significant budgetary and fiscal pressures .
“ Despite negative pressures on credit, the country maintains significant forces, including the size and health of its economy and a sustainable debt burden in spite of continuous and gradual erosion of its economic and fiscal soundness , “the statement said.
” The confirmation of the rating is also supported by the renewed commitment of the government to speed up pace of structural reforms and introduce a more consistent approach in its economic policy and implement a budget savings program , “said Moody’s.
France still under surveillance
A negative outlook, however, means that Moody’s could lower the rating within up to 18 months if the situation were to worsen.
“ The decision to maintain a negative outlook reflects the views of the agency that the risks associated with the implementation of the structural reform program of the government are significant because of the strength of political opposition that could arise and the unfortunate experiences to apply such reforms in the past , “said Moody’s about it.
For this reason, the agency also kept a negative outlook on the ratings” Aa1 “from the Financing Company French economy (SFEF) and the Society of equity participation of the state (SPPE.)
Michel Sapin calls for inquiry
Thursday, the newspaper L’Opinion had been assured that Moody’s informed the French government of an imminent downgrade of the country.
“ erroneous information “, “ ethically reprehensible ” and “ has had an impact on the financial markets “, was moved Friday Finance Minister Michel Sapin has asked the AMF to investigate the information that is proved false.
Moody’s said it provided only 0.4% growth in France in 2014 and 0.9% in 2015 but then gradually accelerated to 1.4% by 2018.
“ If the weak economic environment in the euro zone has contributed to the disappointing performance of France, the growth rate of the country has declined steadily in recent years, from about 2% in the years before the financial crisis to around 1% in the four years following “said Will the same source.
” This reflects a gradual loss of competitiveness as evidenced by the decline in the share of exports in ten years (…) and rigidities in the French economy which have not attacked previous governments , “adds Moody’s.
Low growth and low inflation
The French Ministry of Economy, Industry and Finance said in reaction to the Moody’s decision that “the path to balancing public accounts of the country was affected by weak growth and inflation. “
” But France convinced of his determination and ability to reform our country, “a- Does added the same source, indicating that the economy minister Emmanuel Macron received Moody’s analysts before their decision is made, so as to present their “spirit of reform” proposed by the French government “to recover our economy.”
“ Clarification of the political line of the government is explicitly highlighted by Moody’s ,” said the ministry in a statement and “ decision reflects the strengths of our economy and underlines our commitment to advance reforms in our country . “
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