Moody's affirmed France's sovereign rating at Aa3 with a negative outlook, warning that slowing growth, a widening deficit, rising financing costs and social protests could hinder fiscal consolidation, as the France-Germany 10-year yield spread widened to 178bps Thursday from 85bps in early September.
The negative outlook signals growing concern about France's ability to control its deficit, which is projected at 5.4% of GDP for 2026. A wider sovereign risk premium on French debt tends to weigh on the euro and can keep pressure on euro-area bond spreads as investors demand more compensation for French risk.
Bloomberg·10/22, 10:42 PM
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