Rating agencies skeptical of France's ambitious debt reduction goals

Rating agencies skeptical of France’s ambitious debt reduction goals

PAIRS-On Friday, two prominent rating agencies maintained their evaluation of France’s massive debt mountain, but also questioned the government’s goal of reducing its debt. The sovereign rating of France was kept at “Aa2” by Moody’s, with a stable outlook. France’s rating, which Fitch had lowered the previous year, remained at “AA-” with a stable outlook. In 2023, France’s public deficit increased to 5.5 percent of GDP, above the government’s target of 4.9 percent. Furthermore, after Greece and Italy, France has the third-highest debt ratio in the European Union, with its debt stock at 110.6 percent of GDP.

Rating agencies’ concerns

By 2027, the government wants to reduce debt to less than 3.0 percent of GDP. Still, both agencies raised concerns. According to Moody’s, it is “unlikely” that France would achieve its 2027 deficit target of 2.9 percent. It stated in a remark that “progress in sustainably reducing the budget deficit and government debt is limited. According to the organization, debt may be nearly 115 percent of GDP by 2027. “France’s interest burden will gradually rise and could double over the next decade if the debt level does not materially decline,” it stated. According to Fitch, “it will be difficult to achieve this target as deficit narrowing measures remain largely unspecified, France has only met the 3 percent deficit criterion in four out of the last 20 years.” The findings of the agencies should “encourage us to redouble our determination to restore our public finances and meet the objective” of having debt below 3.0 percent in 2027, according to a statement released by French Finance Minister Bruno Le Maire. “We will keep to our strategy based on growth and full employment, structural reforms and the reduction of public spending,” he stated.

Economic growth projections

2012 saw France lose its triple-A rating, but a double-A rating still indicates a very low likelihood of a default. “France’s ratings are supported by its wealthy and diversified economy with supportive demographic trends,” stated Moody’s. Structural reforms have started to address credit challenges such as high unemployment and weakening competitiveness. France has seen significant ethnic diversity since the Second World War. Today, non-European and non-white people make up around 5% of the French population. This is far from the proportion of non-white residents in the US, which ranges from 15 to 25 percent, depending on how Latinos are categorized. However, it represents a minimum of three million individuals and has compelled the topics of ethnic diversity to be included in French governmental agendas. Unlike many affluent, industrialized nations, France has evolved a different way of dealing with ethnic difficulties. 

Implications of rating agencies’ doubts

In contrast to the US, UK, or even the Netherlands, France continues to follow a “color-blind” approach to public policy. This indicates that hardly any policies are specifically directed towards racial or ethnic groupings. Rather, it addresses questions of social inequality via the lens of geography or class. That being said, since the early 1970s, it has amassed a substantial policy repertoire against racism. Prioritizing hate speech far more than their American equivalents, French regulations up until recently paid comparatively less attention to concerns of discrimination in housing, employment, and the supply of goods and services. It asked the French, depending on the groupings of people involved, a number of questions on how big of a racist nation they thought France was.

Responses from French Government

France has always been a nation of immigrants; but, following World War Two, millions more came to work in the country during the economic boom that lasted from the late 1940s to the early 1970s, transforming France into a multiethnic society. Non-white laborers emigrated from North Africa, sub-Saharan Africa, and South-East Asia (all regions under French colonial control until the 1950s and 1960s), as well as from Turkey and French overseas departments, in addition to considerable numbers of migrants from Southern Europe. These people, who were once thought of as transient economic migrants, are now more often acknowledged as permanent inhabitants of France.

France’s escalating racism prompts calls for boycotting the Paris Olympics 2024, highlighting concerns for fan safety and tarnished global reputation.


In conclusion,  nonetheless, political leaders understand the importance of race and ethnicity. In order to address issues of ethnic disadvantage, programs have been developed that target socioeconomic classes or geographic regions that disproportionately have high minority populations. Anti-racist legislation and regulations have also been implemented by French authorities in response to the problems posed by racial and ethnic plurality. It is helpful to compare and contrast French anti-racism initiatives with those in the US and the UK.



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