Moody’s Decides on No Downgrade but a Warning for France

Moody’s maintained the AA2 note for French debt, but accompanied with a negative outlook, signaling a lack of confidence in the French government’s ability to reduce the deficit. The government of Michel Barnier has announced a mammoth austerity program of €60 billion cuts and taxes, it has, however, proven to be not in control of parliamentary majorities. Yesterday, for instance, an amendment introduced by France Insoumise (the left coalition that was decisive for Macron’s electoral victory), increasing the levy for the super-rich and some companies was defeated in the National Assembly only thanks to the votes of the right-wing Rassemblement National.