France: Moody’s Downgrades Rating to AA3

François Bayrou’s tenure as Prime Minister of the French Republic does not seem to have started under a lucky star. Immediately after the 73-year-old longtime politician was appointed as the new prime minister, the Moody’s agency announced a downgrade to AA3 from AA2, however, the outlook was changed from negative to stable.

“There is nothing unknown to me about the Himalayas towering before us. No one knows the complexity of the situation better than me,” Bayrou explained after his nomination from the Elysee Palace, adding that recovery “is an issue that poses a moral problem, not just a financial one.”

Moody’s had already raised the alarm after the vote that effectively undermined Michel Barnier’s credibility, explaining that this fact would have a negative impact on France’s rating, now the agency has waited until the end of the political crisis to announce the downgrade.

Antoine Armand, Minister of Finance, intervened on the issue, explaining that “Moody’s announced the change in France’s rating to AA3, emphasizing the recent parliamentary events and the current uncertainty affecting the improvement of our public finances,” adding that the choice of Bayrou is already expressing “the will to reduce the deficit.”