Published: 14 Dec 2012 10:04 GMT+01:00 | Print version
Updated: 14 Dec 2012 10:04 GMT+01:00
The Fitch ratings agency said on Friday that it was keeping France's top AAA credit rating, the only one of the three major ratings agencies to do so, but added that its outlook remained negative.
"The affirmation of France's 'AAA' status is underpinned by its wealthy and diversified economy, stable political, civil and social institutions and its exceptional financing flexibility reflecting its status as a large benchmark eurozone sovereign issuer," it said in a statement.
Nevertheless, Fitch's outlook remained negative, meaning that a future downgrade is possible, it said.
France has been downgraded by the other two major credit ratings agencies, Moody's, and Standard and Poor's, from their top ratings to "Aa1" and "AA+" respectively, both with negative outlooks.
Future ratings will depend on the pace and scale of economic reforms in the country, in particular reforms to the labour market.
"The prospective reform of the labour market will be a key indicator of the political and public support for substantive measures that would enhance competitiveness and the growth potential of the French economy necessary to underpin confidence in the long-run sustainability of public finances."
One of France's weaknesses in terms of its credit profile is its level of public debt, which Fitch estimates will stand at a whopping 90 percent of gross domestic product (GDP) by the end of 2012, compared with the current median of 53 percent for other AAA-rated countries.
Out of AAA peers, only the United States and Britain are more indebted, while that of Germany, the next most indebted AAA country, is at 82 percent and due to decline from next year.
The agency said it would watch for the government to meet "its deficit and debt targets and implement structural fiscal measures that provide confidence that public debt will be on firm downward path from 2014".
Fitch's confirmation of its top rating for France does not come as a surprise, since the agency had already said that it would give the new government led by Prime Minister Jean-Marc Ayrault time to set reforms in place and was unlikely to cut the country's rating this year.
At least 20 people were killed and several trainee officers taken hostage when Islamists militants carried out twin bombings on a French-run nuclear plant in Niger. The attack was claimed by the group Movemnent for Oneness and Jihad in West Africa (MUJAO). READ () »
Not everyone gets the chance to party with the stars at the Cannes festival for two days, unless that is, you are the French double of 'Gangnam style' entertainer Psy and you have the nerves of steel to pretend to be him. Meet Denis Carre our undisputed French Face of the Week. READ () »
Jewellery thieves have had some rich pickings at Cannes this year with jewellers announcing on Thursday that a €2million diamond De Grisogono necklace had been stolen, just days after €1.4 million worth of Chopard bling was pilfered. READ () »
Higher education has dominated the news in France recently thanks to plans for more courses to be taught in English so there's no better time to speak to an international academic to find out more about being a lecturer at a French university. READ () »
Of all the inappropriate shapes a teacher could use to teach geometry a swastika has to be near the top of the list, but not for one prof in France, whose use of the Nazi symbol to demonstrate angles has landed her in a spot of bother. READ () »
A contentious proposal that would see more courses at French universities taught in English was given the green light by deputies in the French parliament on Thursday. Critics say the move will lead to France losing its identity. READ () »
France said on Thursday that there were dead among the victims of twin bombings at a uranium processing plant owned by French nuclear giant Areva and a military base in northern Niger. READ () »
A British national, suspected of being the mastermind of €1.6 million bank fraud scam in France was found hanged in his cell in a French prison this week. READ () »
Germany's opposition Social Democrats mark their 150th birthday Thursday, with French President Francois Hollande as the only foreign speaker and conservative Chancellor Angela Merkel in the audience. READ () »
Liberté, egalité, fraternité, the famous motto of the French Republic must be displayed on the facade of all French schools and the Tricolour flag must also be on show outside all establishments, the French Senate ruled on Wednesday. READ () »