Arthur de Laborde / Photo credit: Joël SAGET / AFP 10:22 am, June 02, 2023

The US agency Standard and Poor's will deliver its verdict on the France note Friday night, which could fall from AA to AA-. A new downgrade of the French rating that frightens Bercy which is also doing its utmost to avoid such a scenario.

Pressure is mounting on the government in the run-up to Standard and Poor's decision. After the close of the Wall Street Stock Exchange, around 23 p.m., the US rating agency will deliver its verdict on the economic health of the France. The executive fears a downgrade of the rating, which, after the one already recorded at the end of April by Fitch, would be a real blow with an immediate political impact.

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Avoid further degradation

The government is trying at all costs to avoid further degradation and has been working behind the scenes for several days. In an unprecedented move, Prime Minister Elisabeth Borne herself said that there had been "very close" discussions with Standard & Poor's. Economy Minister Bruno Le Maire received representatives of the agency to give them detailed explanations and defend the French debt reduction strategy.

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If the rating were to be lowered, a downgrade would be bad news for the executive, which regularly highlights its economic credibility and budgetary seriousness. This could undermine investor confidence and increase the rates at which we borrow in the markets. Enough to offer multiple angles of attack to oppositions whether they are favorable or not, on the substance, to a consolidation of public accounts.

But once the blows are over, "we will be able to rely on this symbol to justify the need to tighten the purse strings in the 2024 budget," relativizes a macronian executive.