Standard & Poor’s (S&P) has lowered France’s long-term sovereign credit rating from AA- to A+, flagging concerns about political instability, ballooning public debt, and governance challenges. The agency also adjusted France’s outlook to “stable.”
S&P expects France’s government debt to climb to 121 % of GDP by 2028, up from about 112 % at the end of 2024. The downgrade was delivered unexpectedly, outside the usual review schedule, following a tense political week in which Prime Minister Sébastien Lecornu narrowly survived two no-confidence votes after suspending a controversial pension reform.
S&P warned that rising borrowing costs could spill into broader financial stress unless France can stabilize public finances and restore investor confidence.
France’s governing coalition remains fragile. The decision to suspend the pension reform—one of President Macron’s signature policies—was seen as a political retreat that undermined confidence in the government’s capacity to deliver tough fiscal measures.
With the 2027 presidential election looming, political uncertainty is high. Many analysts believe that reform momentum will stall, making fiscal discipline harder.
France is struggling to control its public spending while keeping growth alive. S&P projects modest economic growth of about 0.7 % in 2025. Without stronger measures, it expects only a slow consolidation of the deficit.
S&P warned that France may hit its 2025 deficit target of 5.4 % of GDP, but that achieving the EU’s ceiling of 3 % will require significant additional steps. It also criticized the weak track record of implementing reform and the policy uncertainty that has dogged successive governments.
In response to the downgrade, Finance Minister Roland Lescure called for unity between the government and parliament to pass a credible budget by year end to placate rating agencies and meet the EU’s 3 % ceiling.
In the past month, Fitch also cut France’s rating from AA- to A+, echoing concerns about debt levels, persistent deficits, and political instability.
The downgrade may increase borrowing costs for France, especially if institutional investors with mandates restricting lower-rated sovereigns are forced to divest.
It also raises broader questions about how U.S.-based rating agencies are influencing European politics. Critics argue that these agencies may penalize states for choosing paths that diverge from neoliberal orthodoxy.