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S&P Maintains France’s AA- Rating with Negative Outlook

France faces a €40 billion funding gap to prevent a potential social-security liquidity shortfall in 2026 as it develops a plan to reach budget equilibrium by 2029.

L’agence S&P, à New York.
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François Bayrou lors de la conférence sur les finances publiques tenue le 15 avril pour mettre en garde contre le péril de la dette.
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Overview

  • Standard & Poor’s kept France’s credit rating at AA- with a negative outlook on May 30 after finding no notable improvement in public finances since February.
  • Prime Minister François Bayrou must identify €40 billion in savings next year across the state, social-security system and local governments, with a broad VAT hike still on the table.
  • The Cour des comptes has warned of a possible 2026 liquidity crisis for social-security finances as spending continues to outpace revenues.
  • France’s debt has surpassed 113 percent of GDP and interest charges now account for more than 5 percent of tax receipts, exceeding levels in Germany and the Netherlands.
  • Fitch also holds France at AA- with a negative outlook while Moody’s rates it Aa3 with a stable perspective, signaling divergence among rating agencies.