STANDARD & Poor’s head of France yesterday said the agency was confident of maintaining France’s AAA credit rating unchanged with a stable outlook.
Concerns about the creditworthiness of euro area members spread to France last week, with speculation it may lose its AAA debt rating hammering shares in the nation’s banks and sending the risk premium on its government bonds to a euro-era record.
France’s top rating was affirmed by Standard and Poor’s, Moody’s Investors Service and Fitch Ratings on August 10th.
“We are confident in this stable AAA rating,” Carole Sirou told RTL radio, adding that the grade was not dependent on specific budgetary commitments but a “trajectory, a commitment”.
French president Nicolas Sarkozy and German chancellor Angela Merkel have called for euro-wide fiscal controls as part of a package of ideas aimed at restoring markets’ shaken faith in the euro.
This package includes a constitutional rule to limit public deficits in all euro zone states.
While the fiscal rule planned in France is not binding, it is seen as symbolic of France’s commitment to reining in public finances.
Analysts say that a failure by Mr Sarkozy to pass the measure could be a trigger for rating agencies to put France’s AAA rating on negative watch.
However, left-wing presidential hopeful Francois Hollande said no one in France’s Socialist Party would back the inclusion of the rule.
“I do not imagine there would be a socialist who could vote for a golden rule which has no substance and which is foreseen for 2013, so for me the issue is resolved,” Mr Hollande said.
Germany has a constitutional rule on budget discipline, but Mr Sarkozy cannot muster the super-majority he would need in a two-chamber parliamentary vote to get such a clause written into France’s constitution.
