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France

France at 'no risk' of credit downgrade, says government

Text by News Wires

Latest update : 2010-11-30

France is "at no risk" of a credit downgrade despite its ballooning budget deficit, according to Budget Minister Francois Baroin (pictured).

AFP - France foresees "no risk" that its credit rating could be downgraded, the government's chief spokesman said on Tuesday, amid fears that government debt could undermine economies across the eurozone.

France still enjoys the maximum AAA credit rating, despite market concerns over its burgeoning public deficit, and Budget Minister Francois Baroin told reporters the government did not expect it to be downgraded.

Speaking after a cabinet meeting chaired by President Nicolas Sarkozy, Baroin dismissed speculation that France might be the next eurozone country to face steeper interest payments on government issued bonds.

There was "no risk" and "no concern", he said.

In this, he was echoing comments on Monday by Finance Minister Christine Lagarde, who was reacting to a story in the French weekly Journal du Dimanche headlined: "Financial crisis: France threatened."

"To say that France is threatened makes headlines ... but I think it is economically unsound," she told RTL radio.

"When I look at the interest rate and risk curves, when I consider the rates at which France is financing itself, we are at the head of the pack, we have the lowest interest rates."

She added that along with Germany, the Netherlands, Austria and Finland, "we are the best risks in Europe."

Europe has already been forced to bail out Greece and Ireland to avoid debt defaults and possible damage to the single currency, and markets are now eyeing Portugal and Spain with concern.
 

Date created : 2010-11-30

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