Moody's downgrades France's credit rating amid political crisis

From 'Aa2' to 'Aa3'

Moody’s has downgraded France’s credit rating less than two weeks after former French prime minister Michel Barnier lost a vote of no confidence in parliament.

On Saturday (14 December), Moody's downgraded France's domestic- and foreign-currency long-term issuer and domestic-currency senior unsecured ratings from 'Aa2' to 'Aa3'. However, the agency switched its outlook from 'negative' to 'stable', indicating that the rating is not expected to further regress in the future. The downgrade decision came on the back of Moody's expectation that France's "public finances will be substantially weakened over the coming year" as a result of "political fragmentation" which, in turn, is expected to hamper "meaningful fiscal consolidation". French bo...