France’s credit rating was downgraded this week by Fitch, a top global ratings agency, triggering political fallout. The downgrade—from “AA-” to “A+”—means investors now see France as a slightly riskier bet when lending money. Fitch said France’s debt is growing too fast and won’t stabilize until at least 2027 unless major changes are made. This makes it more expensive for France to borrow money, as investors will demand higher interest rates.
The downgrade follows political turmoil over how to fix France’s finances. Prime Minister François Bayrou resigned after losing a key confidence vote in parliament over his proposed austerity budget, which aimed to cut spending and reduce debt. His replacement, Sébastien Lecornu, now faces the tough task of writing a new budget while likely leading a weak minority government. Fitch cited France’s “fragmented and polarized” politics as a reason for the downgrade, warning it would be hard for any government to make real financial reforms.
Critics blame long-standing problems. Outgoing Interior Minister Bruno Retailleau said the downgrade reflects decades of “fiscal mismanagement” and government overspending. Bayrou, in a statement after stepping down, said France’s political elite refuses to face financial reality and is now paying the price. While France’s economy remains strong in many ways, this downgrade sends a clear message: without urgent reforms, the country’s financial credibility will continue to slip.
