France‘s Credit Rating Downgraded, Sparks Criticism from Bayrou
France’s sovereign credit rating was recently downgraded by Fitch Ratings, citing political instability and concerns over the government’s ability to consolidate its budget. The agency pointed to the recent vote of confidence faced by the government as evidence of “fragmentation and growing polarization” in domestic policy, weakening the political system’s capacity to implement meaningful budgetary adjustments. Fitch now considers it unlikely France will achieve its goal of bringing the public deficit below 3% of GDP by 2029.
Eric Coquerel, President of the Assembly Finance Committee (LFI), responded to the downgrade by criticizing those he believes “dramatized the state of public finances for the unique profit of their political agenda.” He asserted that “French debt remains safe and sought,” and warned that a future government relying on market-imposed austerity measures would risk exacerbating the country’s economic, social, and ecological crises.
The downgrade has also drawn criticism from former Prime Minister François Bayrou, who accused the “elites” of contributing to the situation. While details of Bayrou’s full statement weren’t provided in the source material, his reaction highlights the political sensitivity surrounding the rating change.
In contrast to France’s situation, Spain received positive news from S&P Global Ratings.The agency upgraded Spain’s credit rating from “A” to “A+” on Friday, citing strong economic growth. This marks a significant recovery for Spain, which saw its rating fall close to speculative levels during the economic crisis of the early 2010s. S&P has improved Spain’s rating by five notches as 2013.
S&P attributes Spain’s improved performance to structural reforms, robust domestic demand, and a resurgence in investment, projecting a 2.6% growth rate for 2025. Spain’s GDP increased by 0.7% in the second quarter compared to the previous three months, and 2.8% year-on-year – double the Eurozone average of 1.4%. The agency also highlighted a decade of private sector deleveraging and a relatively low level of trade exposure to the United States as positive factors.
Despite the upgrade,S&P maintains a stable outlook,citing Spain’s high debt level (101.8% of GDP at the end of 2024) and the potential for increased public spending as counterbalancing factors.
