S&P spares France from rating downgrade

PARIS (Reuters) – Ratings agency S&P spared France on Friday the embarrassment of downgrading the country’s sovereign debt, but remained cautious about the outlook on account of the strained public accounts.

S&P left the country’s AA rating untouched after a regular review and said that the outlook remained negative due to “downside risks to our forecast for France’s public finances amid its already elevated general government debt”.

A downgrade would have been the second in six weeks after rival agency Fitch cut its rating at the end of April to AA- over concerns about potential political paralysis and social unrest.

Finance Minister Bruno Le Maire told weekend newspaper Le Journal du Dimanche that S&P’s decision to keep its AA rating was a “positive signal” and that the government’s public finance strategy was credible.

President Emmanuel Macron government is under pressure to prove that the government can stick to its deficit and debt reduction plans in the face of stubbornly high public spending and a rising cost of interest payments.

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