Does The France will repay its sovereign debt? The Chinese rating agency Dagong expressed Monday, February 16 in a statement doubts lowering of A + to A Note of the country’s debt denominated in local and international currencies.
“The weakness economic growth has delayed the process of fiscal consolidation “, says the agency began in the mid 90s and known to have lowered the rating in November 2010 she attributes to the sovereign debt of the United States , citing the threat of bankruptcy.
A deficit to 2.5% in 2015
The difficulties of the government to reform are a problem for France, also points the agency Chinese notation:
“[The] External policy constraints and internal policy divergence of the ruling party will slow the process of structural reform.”
While the “economic fundamentals are not going to improve in the short term” , the reforms launched by France (CICE head) will reduce the impact of tax cuts, estimated Dagong which thus expects the budget deficit to rise to 4.5% in 2015 (against 4.4% in 2014) while the government in its estimate supported by Brussels expects 4.1%.
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Moreover, “the growing gap between the sources of repayment and the ability to create wealth reduced the viability of the public debt, which weakens the ability to repay “ of the government, she wrote.
Enjoy the euro down
However, for the rating agency, France should benefit from a positive economic environment with the decline of the euro and weak energy prices. She adds:
“The quantitative easing by the ECB will continue to ensure strong support to the high demand for funding from the French government, which will stabilize the level of sovereign credit “
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