Moody’s Downgrades France’s Credit Rating

Published On Dec 14, 2024, 6:33 AM

Moody's has downgraded France's credit rating to Aa3, citing political instability and doubts about the new government's ability to address the country's fiscal challenges. The downgrade is expected to increase borrowing costs and reflects a lack of confidence in the administration's capacity to manage its budget effectively. Newly appointed Prime Minister François Bayrou faces significant hurdles in stabilizing a divided Parliament and creating a budget for 2025 amidst growing concerns about France's financial health.

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The downgrade in France's credit rating may lead to increased borrowing costs, negatively impacting the economy. This situation could create further uncertainty in the European markets, particularly for sectors that rely on stable government financing.

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