Skip to comments.France Fights to Keep Its [Credit] Rating
Posted on 08/10/2011 2:46:34 PM PDT by La Enchiladita
France is still a triple-A rated countrybut it has a fight on its hands to convince markets. President Nicolas Sarkozy broke off his vacation Wednesday and summoned ministers to Paris to discuss how to achieve "imperative" deficit-reduction targets. But that couldn't prevent a worrying slide in French bank shares, not least because France's fate is only partly in its own hands.
The market has effectively downgraded French debt already. The spread between 10-year French government bonds and German bunds has widened to 0.85 percentage point this week, three times wider than a year ago. Some of this is down to concern about France's own credit quality: France's debt to GDP ratio is forecast to hit nearly 90% in 2013, the highest among remaining triple-A rated countries. Last year, France ran a budget deficit of 7%; only Spain, Portugal, Greece and Ireland among euro-zone countries were higher.
(Excerpt) Read more at online.wsj.com ...
It should be easy for the French to keep their credit rating up. I mean, they can offer the raters some French wine and cheeses and croissants and those Parisian women! ooh-la-la! Now, how could those rating companies downgrade France with an offer like that, no?
I remember that some were saying of the S&P downgrade of the US that it doesn’t make a whole lot of sense because France is in worse shape as far as spending and debt, and it’s not like they can just go print up a bunch of euros and make it all, or even some of it better.
...are they raising taxes and spending more?
That’s how you save your credit rating after all, right?