France vows economic reforms to continue after debt downgrade

STOCKHOLM: France will go ahead with structural reforms to overhaul its economy after credit ratings agency Fitch downgraded the country’s debt worthiness, Finance Minister Bruno Le Maire told AFP on Saturday.

Fitch downgraded France’s debt worthiness a notch to “AA-” from “AA” on Friday, claiming the country’s “fiscal metrics are weaker than peers”.

“I believe that the facts invalidate Fitch’s assessment. We are able to implement structural reforms and we will continue to implement structural reforms for the country,” Le Maire said in Stockholm where he is for an EU finance ministers’ meeting.

“Public finances, and in particular the high level of government debt, are a rating weakness,” Fitch said in a commentary on its rating action which said the country’s outlook was stable.

It suggested that protests and political deadlock could put pressure on President Emmanuel Macron to change course on fiscal policy or even reverse reforms.

Macron has sought to push through unpopular reforms to France’s pension system, including increasing the retirement age to 64 from 62, insisting the changes are necessary for the system to be financially viable.

With popularity plunging after the signing of the pension reform which sparked nationwide protests, Macron has set a 100-day target to relaunch his second term.

Le Maire dismissed concerns about the government’s direction. “Do not doubt our complete determination to restore the nation’s public finances.”

He added: “We have proven our ability… to pass reforms that transform the French economic model.”

The minister vowed to accelerate the reduction of France’s debt, to reduce the deficit and make faster cuts to public expenditure.