The France pledges to continue reforms after Fitch downgrades its rating

"I believe that the facts invalidate the assessment of the Fitch agency. We are able to pass structural reforms for the country," he said, citing the reform of unemployment insurance and pensions.

"And we will continue to pass structural reforms for the country," he said in the statement to AFP.

Fitch downgraded the French rating on Friday evening, citing strong social tensions around the pension reform.

"The political impasse and social movements (sometimes violent) constitute a risk for Macron's reform program," the rating agency said in a statement, announcing the downgrading of the French rating by one notch, to "AA-" against "AA" previously.

"Even the referees of the financial market give a red card to Emmanuel Macron on his management of the pension reform," ironically said on Twitter the president of the Finance Committee of the National Assembly Eric Coquerel (La France insoumise).

"Uncontrolled spending, industrial production at an all-time low, inflation-linked borrowing. The France spends more than it produces. The truth is catching up with us after years of impotence and demagoguery," attacked on the same network the president of the Republicans Eric Ciotti.

Bruno Le Maire, for his part, reaffirmed Saturday his willingness to carry out "a whole series of reforms that will accelerate the transformation of the French economic model". He referred to the "green industries bill that will be presented in a few days and which will make it possible to reindustrialize the France, open new industrial sites and create new jobs".

"Do not doubt our total determination to restore the nation's public finances (...) to accelerate the country's deleveraging, reduce deficits and accelerate the reduction of public spending," the French minister said from Stockholm, where he is attending a meeting of EU finance ministers.

'Radical forces'

Six weeks ago, the French government definitively adopted its pension reform project providing for a postponement of the legal age from 62 to 64, thanks to the support of Article 49-3 of the Constitution which allows a text to be passed without a vote in Parliament.

Economy Minister Bruno Le Maire during a meeting in Stockholm, April 28, 2023 © Caisa RASMUSSEN / TT NEWS AGENCY / AFP

This decision led to a clear hardening of the protest at the social level, and several days of violent demonstrations throughout the country, recalling the episode of the yellow vests from 2018.

"This decision has led to protests and strikes throughout the country and will probably strengthen radical and anti-establishment forces," said Fitch, which had attached a negative outlook to its previous rating, i.e. the risk of a downgrade.

The current situation could also "create pressure for a more expansionary fiscal policy or a reversal of previous reforms," the agency fears.

A "pessimistic assessment", reacted Saturday on Twitter the deputy Renaissance Jean-René Cazeneuve, general rapporteur of the finance committee, taking up the words used the day before by Bruno Le Maire.

Expected to update its rating last Friday, Moody's finally did not announce a new rating, while S&P Global, which currently gives the rating of "AA" to the France with a negative outlook, is due to publish its conclusions on June 2.

© 2023 AFP