Scope Ratings reviews its ratings either yearly, or at least every six months in the case of sovereigns, sub-sovereigns and supranational organisations. Scope performs monitoring reviews to determine whether outstanding ratings remain proportionate. Monitoring reviews are conducted either by performing a portfolio review in terms of the applicable methodology/ies, latest developments, and the rated entity’s financial and operational aspects relative to similarly-rated peers; or through targeted reviews of an individual credit. Scope publicly announces the completion of each monitoring review on its website.

Scope completed the monitoring review for the French Republic (AA/Stable; S-1+/Stable) on 25 January 2021, incorporating the update from the sovereign methodology. The review resulted in no action on the assigned ratings. This monitoring note does not constitute a rating action nor does it indicate the likelihood of a credit rating action in the short term. The latest information on the credit ratings in this monitoring note along with the associated ratings history can be found on www.scoperatings.com.

Key rating factors

France’s AA/Stable is supported by the French Republic’s large and diversified economy, its track record of structural reforms and high investment underpinning growth potential, and the favourable debt structure. At the same time, high public debt levels, an extensive fiscal deficit in 2020 and labour market challenges remain structural weaknesses. The Covid health crisis has hit the French economy more severely than most European peers, while its resilient economy, extensive fiscal stimulus measures and increased ECB support programmes soften the shock to the economy’s growth potential at the cost of higher public debt. Longer term, the main credit challenges are i) delay of structural reforms to raise productivity and employment; iii) lack of sustained fiscal consolidation via spending reduction, and iii) increasing contingent liabilities from non-financial debt built up during the Covid pandemic.

For the updated scorecards accompanying this review, click here.

The methodology applicable for the reviewed rating(s) and/or rating Outlook(s) (Rating Methodology: Sovereign Ratings, 9 October 2020) is available on https://www.scoperatings.com/#!methodology/list.
This monitoring note is issued by Scope Ratings GmbH, Lennéstraße 5, D-10785 Berlin, Tel +49 30 27891-0.
Lead analyst: Bernhard Bartels, Director.

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