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Rating agency Fitch downgrades France, Bruno Le Maire promises “structural reforms”

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The day after France’s financial rating was downgraded by Fitch, on April 28, Finance Minister Bruno Le Maire confirmed on Saturday that Paris would continue to “to pass structural reforms”.

I think the facts invalidate Fitch’s assessment. We are in a position to move forward with the structural reforms of the country.”He told AFP, citing unemployment and pension insurance reform. We will continue to pass the country’s structural reforms. »

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Fitch lowered the French currency on Friday night, citing strong social tensions at work over pension reform. Political stalemate and (sometimes violent) social movements pose a threat to Macron’s reform agenda.In a press release, the rating agency announced a downgrade of France’s rating by one notch, to “AA-“ against “AA” previously.

“We have before us a whole series of reforms that will accelerate the transformation of the French economic model”Bruno Le Maire argued on Saturday, referring in particular to A green industries bill. “There is no doubt about our total determination to restore the nation’s public finances (…) to accelerate the country’s indebtedness, reduce the deficit and accelerate the reduction of public spending”He also said from Stockholm where he is taking part in a meeting of EU finance ministers.

The hardening of the conflict

Six weeks ago, the French government finally adopted its project to reform the retirement system, which provides for the postponement of the legal age from 62 to 64, based on Article 49-3 of the Constitution that allows a text to be passed without a vote in Parliament. This decision led to a noticeable hardening of the protest on the social level.

“This decision sparked protests and strikes across the country and is likely to strengthen radical and anti-establishment forces.”Fitch Ratings, which had linked its previous rating to a negative outlook, said no downgrade risk. The current situation can also “To press for a more expansionary fiscal policy or to reverse previous reforms”Agency fears.

Expecting to update its rating last Friday, Moody’s did not finally announce a new rating, while Standard & Poor’s Worldwide, which is currently assigning a rating “AA” to France with a negative outlook, and is due to publish its results on June 2.

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