FRANCE

Fitch downgrades France’s credit rating to 'AA'

Philippe Huguen, AFP | Ratings agency Fitch downgraded France’s credit rating on Friday to “AA” from a previous “AA+”
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Fitch Ratings has lowered France’s credit rating by one notch to “AA” – two steps below the top triple-A rating – over concerns about the country’s budget.

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"The weak outlook for the French economy impairs the prospects for fiscal consolidation and stabilizing the public debt ratio," the ratings agency said in a statement.

France’s government warned in September that its deficit for the year may actually go up, rather than down – as previously promised. The European Union has rules on the size of deficits and debts that members must meet in an effort to avoid another financial crisis.

Fitch warned in October of a possible downgrade, citing France’s repeated inability to stick to its own targets, which are much less than those imposed by the EU.

"The 2015 budget involves a significant slippage against prior budget deficit targets," it said.

The rating agency said Friday that the country’s planning has hurt its credibility and its ability to absorb potential financial shocks.

Fitch downgraded France’s long-term foreign and local currency issuer default ratings one notch to “AA” from “AA+”, keeping it in investment-grade territory. The outlook is stable.

Fitch had already downgraded France from the top “AAA” rating almost a year ago exactly.

(FRANCE 24 with AP, AFP)

 

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