(Boursier.com) – Fitch Ratings has assigned the rating ‘AA’ to France. The rating agency degrades a notch assessing the sovereign rating, which was previously ‘AA +’. Fitch penalizes the weak economy and suddenly sees out a little more deficit reduction targets. This decision was accompanied by a perspective ‘stable’. The rating agency doubts the potential of French growth, noting that the country’s growth for 2014 is expected to be lower than the average for the euro zone. This is a first in 4 years!
“poor economic performance”
The Fitch rating agency has degraded to ‘AA’ perspective negative ‘announced on 14 October. According to Fitch, the weakness of the French economy threatens the prospects of fiscal consolidation and stabilization of the public debt ratio. “The pursuit of a period of poor economic performance, which began in 2012, increases the uncertainty about growth prospects in the medium term,” Fitch doubt. The rating agency punishes French fiscal slippages and considers that the structural reforms of the country are not sufficient to halt the loss of competitiveness.
Bercy “notes”
In a release, Michel Sapin “takes note of the decision of Fitch”, recalling that the country “has recently lowered the public deficit for 2015 (from 4.3% to 4.1% of GDP) and for years “. This announcement has therefore not enough to convince Fitch to maintain its ‘AA +’. The agency estimates that 4.1% of GDP, the deficit expected for 2015 contains no improvement over 2013. Moreover, Fitch anticipates a deficit for 2014 of 4.4% instead of 3 8% announced by Bercy.
Staying the course in the storm
Michel Sapin recalls the difficult European economic context and ensures want to stay the course of reform “with the implementation expected savings, with the continuation of reforms needed to boost growth and make them more competitive as well as the Pact of responsibility and solidarity and competitiveness employment tax credit. ” The French Minister of Finance and the Public Accounts prefers to keep a positive outlook on the debt, reaffirming the quality of the signature of the French state. “The French debt is among the safest and most liquid in the world, with a load of debt contained, as Fitch points out in its assessment. She has a strong and diversified investor base. This investor confidence eat a coherent economic strategy, the government intends to continue with determination “
degradation Cascade
In mid-October, Standard & amp.; Poor’s downgraded the outlook of France from ‘stable’ to ‘negative’. The US rating agency confirmed the long-term solvency of the country ‘AA’, an assessment awarded in 2012. S & amp image; P, Moody’s warned in the month of September, the depletion of French State, a decision that was followed in mid-October by the Fitch put France on negative watch. Finally, remember that Fitch was the last to deprive France of its triple A, in July 2013.
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