Chimera over Paris: France's credit rating downgraded to historic low
The international agency Fitch Ratings has downgraded France's credit rating from "AA-" to "A+". This was done against the background of political instability in the country and the growing national debt. What this decision means for Paris and how it will affect the position of Emmanuel Macron is in the Izvestia article.
Against the background of instability
France has recently been increasingly plunged into political and economic uncertainty. The government of Francois Bayrou resigned after a parliamentary vote on September 8, marking the fourth time in the past two years. Later, on the 10th, mass protests swept across the country, during which the protesters accused the government and politicians of being disconnected from the realities inside France and ignoring the problems of ordinary people.
Against this background, just a few days after the new Prime Minister Sebastian Lecorn took office, Fitch Ratings lowered France's long-term credit rating to A+, the worst in the country's history.
The Agency identified several reasons for its decision. One of them is related to the continued growth of the country's public debt. In 2024, it amounted to €3.3 trillion (about 113.2% of GDP), in 2025 it already amounted to €3.4 trillion. According to the forecast of Fitch Ratings, in 2027 it will grow to 121% of GDP. In this context, political upheavals in France are also noted, especially the frequent change of government.
"This instability weakens the ability of the political system to achieve substantial fiscal consolidation," Fitch said in a statement.
The agency also doubts that France's budget deficit will fall to 3% of GDP by 2029, as the previous government wanted. Last year, it was 5.8%, almost twice the legal limit (3%) set in the EU last year. As for the national debt, this figure, in accordance with the Maastricht Treaty, should not exceed 60%.
All this, according to political analyst Ilona Mizova, makes France less reliable for international investors.
As noted by Andrey Kudryavtsev, senior researcher at the E.M. Primakov Center for European Studies of the Russian Academy of Sciences, the problem with the breakdown of public finances appeared in France a long time ago, it grew for a long time and was not solved.
— When crises came, they got out of them at any cost, flooding the problems with budgetary funds. And when economic stabilization came and it was necessary to "improve" the budget, this was avoided because they were afraid to disrupt their electoral ratings, the expert explains.
The decline of the eurozone
According to Alexander Arsky, associate Professor of the Department of Logistics at the Financial University under the Government of the Russian Federation, the decline in the credit ratings of the "locomotives" of the EU economy is the beginning of the economic decline of the eurozone and a harbinger of its subsequent economic and political decomposition.
He also notes that loans for France will become more expensive, and with an increase in the loan rate, there will be a need to reduce social costs. This may cause new protests by both the French and migrants, inflaming the already quite criminal situation in France.
— There are no signs of an increase in the rating now, as its current decline does not reflect all the drama. This is just the beginning," states Alexander Arsky.
According to the economist, in the long term, the country's economy can be saved by international investments with the creation of jobs in France itself and new sales markets for products. In the medium term, Alexander Arsky sees a way out of the situation solely in the resignation of the current French President Emmanuel Macron.
Investment adviser, member of the registry of the Central Bank of the Russian Federation Yulia Kuznetsova adds that the country's high public debt, combined with a budget deficit, means more expensive borrowing for the government: yields on French government bonds will rise, and debt service costs will rise. All this, the expert notes, limits the possibilities for financing social programs and investments, which will worsen the problems of economic growth.
A blow to reputation
Against the background of political and economic turmoil in France, there are more and more calls for Macron's resignation, but the new Prime Minister, Sebastian Lecorgne, is already threatened with a vote of no confidence. In this context, Andrey Kudryavtsev notes that legally impeaching the president will be difficult, almost impossible. For its implementation, a large-scale social crisis is needed. According to the expert, Macron himself will not resign.
However, an absolute paralysis of parliament is possible. For this, Andrey Kudryavtsev adds, the series of government resignations through a vote of no confidence must continue. To do this, the left-wing alliance "Unconquered France" and the far-right "National Union" must act in a consolidated manner, just as in previous cases.
— Whether they will be ready to take responsibility for the paralysis of the country through the paralysis of parliament is an open question, there is no answer to it yet. The development of events will show, because this is a huge political responsibility," the expert believes.
Yulia Kuznetsova adds that for Emmanuel Macron, a credit rating downgrade is a blow to his reputation and an additional pressure factor.
— It casts doubt on the effectiveness of his economic policy and reinforces criticism from the opposition. The political costs can be serious — the need to reduce budget expenditures in the face of public discontent will increase the risk of further escalation of protests," the Izvestia interlocutor believes.
Ilona Mizova adds that Fitch Ratings' decision is a political blow to the legitimacy of the macroeconomic course and undermines confidence in the president himself.
— Macron was elected in 2017 and 2022 as a "pro-European" leader and advocate of financial stability and reform. The downgrade is the verdict of international experts that his policy is insufficient to fix structural problems, she believes.
The expert emphasizes that the incident weakens France's ambitions for political leadership on the continent. Financial problems undermine its credibility in negotiations on pan-European budget rules, and Germany, which has a higher rating, gets additional leverage in controversial issues.
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