Dbrs cuts France's rating to 'AA' from 'AA (high)', stable trend

After that of the Fitch agency comes a new downgrade for France's rating: in fact, the agency Dbrs downgraded the French Republic's long-term rating by one level, taking it from AA (high) to AA and changing the outlook from Negative to Stable.

Underlying the decision," a note explained, "was the agency's conviction that France's public accounts consolidation path will be more gradual than envisaged in the plan presented in October 2024 due to the problems posed by increasing domestic political fragmentation.

DBRS believes that this political environment and increasing government instability limit the effectiveness of fiscal policy approaches with 'high execution risks regarding France's ability to meet its budgetary targets in the coming years'.

France, it is recalled, recorded the largest budget deficit in the euro area in 2024 and is likely to do so again in 2025. The fiscal adjustment effort required in the 2026 budget to reach the deficit target of 4.6 per cent of GDP set in the Medium-Term Fiscal Framework Plan (MTFSP) is significant and France's debt-to-GDP ratio is likely to remain high for a longer period in the medium term, contrary to forecasts of a peak at 116.5 per cent in 2027 and a downward trend from 2028 onwards'.