Ratings agency Standard & Poor’s (S&P) said on Thursday it had maintained its top AAA rating on France, citing the country’s “stable” political environment and its “prudent economic policies.”
“The ratings reflect our views of the wealth and depth of France’s economy, as well as its political environment, which we regard as stable and oriented toward prudent economic policies,” S&P credit analyst Marko Mrsnik said.
The agency, affirming its AAA rating on long-term debt and its A-1 plus rating on short-term debt, said its outlook on France remained stable.
S&P cited the “openness and resilience of the French economy” as well as the country’s highly skilled and productive labor force, and its secure financial sector, but it added that such strengths were partially offset by “France’s relatively sizable tax burden and general government debt, and its labor market rigidities.”
The agency said its stable outlook on France reflected its assumption that the French government would carry on with its budget-cutting measures that could reduce the public deficit to 3 percent of output — the prescribed eurozone limit — in 2013.
France has pledged to reduce the public deficit, which covers central and regional governments along with social welfare spending, from a record 7.7 percent this year to 6 percent next year and 4.6 percent in 2012.
“The stable outlook is based on our view of the French government’s substantial achievements with its budgetary consolidation strategy, enabling it to meet its fiscal targets through 2013,” Mrsnik said.