Moody’s gave its verdict tonight on the rating of France – Le Figaro

In January, the agency has kept the pressure on the government with its “negative outlook.” Since then, the competition policy desired by François Hollande, has taken shape.

late January, Moody’s decided not to change the rating of France who then kept his Aa1. But it also kept the “negative outlook” to put pressure on the government. While acknowledging that “the government has introduced or announced a number of measures” (including Cice Pact and responsibility) to improve competitiveness that continues to deteriorate for years, Moody’s wanted to ensure that the executive was not simply an announcement effect. Because, as highlighted in the agency, “the implementation and effectiveness of these initiatives” could “face political and social tensions.” The analyst responsible for rating Moody’s also noted that “many details” missing on how we can increase growth and employment while reducing public spending. “It is therefore difficult to assess at this stage the probability that the agreement achieves its goals,” contrasted Moody’s. ll finally stressed that the fiscal space of France was “limited”, which “has a persistent risk of missing targets” of budgetary discipline.

What has happened since? Prime Minister Manuel Valls detailed precisely the form that would lower the cost of labor for business (20 billion of tax credit and competitiveness additional 10 billion to reduce charges under the pact). Celi it is certainly not yet passed by the parliament, but it is on track. And insofar François Hollande has made the lighthouse point economic policy, members-including PS-slingers should do without.

At the same time the Prime Minister has started to detail the reduction of expenditure. Although there are still many question marks, particularly on structural reforms. But at least the process has begun. The 50 billion of spending cuts will be divided between the state (18 billion), local authorities (11 billion) and social protection (21 billion).

Meanwhile, the Minister of Finance Michel Sapin, sent to Brussels a multiannual program of public finances, which provides a good return of the public deficit to 3% of GDP in 2015 following a step to 3.8% this year.

Make prognostic decisions of a rating agency is dangerous; but degradation would, in view of these developments, difficult to understand.