Fitch downgrades France to AA down – FAZ – Frankfurter Allgemeine Zeitung

Fitch downgrades France to AA down – FAZ – Frankfurter Allgemeine Zeitung

      

 
 
 
 
 
     
 
 
 
 
 
 
 
 
         

 
 
 
 
 
          Too little: The reforms under French President Francois Hollande ranging from the perspective of Fitch is not enough.
     

 
                                           
 
 
     
     
     
         
         
                                                              

The rating agency Fitch has the creditworthiness of France’s second-best downgraded to the third-highest grade AA. The efforts of the government in Paris to press the new debt and boost the economy, are not sufficient to prevent the downgrade, Fitch said in Washington on Friday night. “The weak economic outlook affects the fiscal consolidation and stabilization of the debt ratio.”

                         
         
         
                                                             
                                 

Fitch mid-October to cut its outlook for France “negative” and threatened to downgrade it. The agency had then called for greater reform efforts of the socialist government – and was disappointed. For the first time in four years, the growth in France would fall short of the average growth in the euro zone, the credit rating examiner appreciate now. The reform program “does not appear sufficient to reverse the negative trends, which are on the long-term growth and competitiveness.”

                         
         
         
                                                             

debt threatens to grow

Fitch argued that the 2015 budget contained a “significant slippage” of earlier priority targets for consolidation. That could amount to the total debt of France further grow even higher at 98 percent of the economy or power.

                         
         
         
                                                                                                                                                                                                                              

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Paris had adopted in September from the target, next year the current budget deficit below the EU demanded three-percent ceiling to press. On Thursday, the Treasury set the objective that borrowing by 4.4 percent this with 4.1 and 3.6 per cent in the next two years to reduce until 2017 to 2.7 percent.

                         
         
         
                                                             

Also in the EU in compression

Because of the tight budgetary situation, France is also under pressure from the EU. However, Brussels Paris late November to early March deadline granted a one to get his budget through additional measures under control and avoid any possible penalties so.

                         
         
         
                                                             

The French Finance Minister Michel Sapin said after the Herabstufungsmitteilung by Fitch, Paris believe in a “difficult economic environment in Europe” at its fixed exchange rate, boost growth, with the economy and should be made more competitive. This “first achieved success” were, Sapin added. French business enterprises benefited from tax cuts, which will continue in the years to come.

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Lack of reforms

credit rating agency Fitch downgrades France down

From the perspective of the rating agency Fitch France reforms are not sufficient. Paris is unable to push the current budget deficit below the requirement of the EU three-percent ceiling.

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