France in ‘very close discussions’ with S&P ahead of rating update

PARIS (Reuters) – French Economy Minister Bruno Le Maire is in “very close discussions” with credit ratings agency Standard and Poor’s (NYSE:), which put France on notice in January for a possible downgrade, Prime Minister Elisabeth Borne said on Sunday.

The agency, which is due to give an update on France on June 2, said a downgrade from its current “AA” rating could be triggered by a lack of reforms that it said France needed to implement to reduce the burden on spending.

“There are very close discussions between Standard and Poor’s and Bruno Le Maire,” Borne told Radio J.

“I think there were detailed explanations from Bruno Le Maire to Standard and Poor’s on everything we’re doing to control our public finances and I think that we act in this direction,” she said.

Le Maire explained France’s reforms and its objective of cutting the country’s budget deficit to 2.7% of gross domestic product by 2027, she said.

Fellow credit ratings agency Fitch cut France’s sovereign credit rating by one notch to “AA-” in April, saying a potential political deadlock and social unrest posed risks to President Emmanuel Macron’s reform agenda.