France received another debt warning—the third one after S&P earlier this year and Fitch last week. Scope Rating, the EU rating agency, downgraded French debt from AA to AA−. An update assessment by Moody’s is expected, while another assessment by S&P is scheduled for November. Twenty-nine “investors” are leaving French assets, apparently due to the political instability, with a minority government depending on variable majorities in Parliament. As a consequence, the spread between French and German bonds rose to over 80 points, up from below 50 earlier this year.
Sticking to the pro-austerity shift in the EU after the Covid hangover, French Prime Minister Michel Barnier has announced budget cuts and new taxes of €60 billion.
