“The biggest uncertainty at present is to know whether President Macron will be able to renew the majority of his ‘République en Marche’ party in the legislative elections set for June,” says Thomas Gillet, associate director, sovereign and public sector ratings, at Scope Ratings.

“The outcome of those elections will therefore prove decisive in assessing the real momentum behind his reform agenda. Weakening popular support would require postponing or scaling down reforms that are critical for France’s credit outlook,” Gillet adds.

The next government in France (AA/Stable) needs to tackle structural economic and social challenges such as rising public debt, declining productivity and competitiveness, residual labour market rigidities, in addition to addressing the rising cost of looking after the country’s ageing population and energy transition – all in the context of higher inflation and the repercussions of the war in Ukraine.

Scope’s next credit rating review date is scheduled for July 22.

Scope’s latest research on France:

France: welfare state faces fiscal squeeze if no change in policy under next president, April 2022

France: will enhanced governance framework for public finances improve fiscal credibility? April 2022

Political fragmentation and polarisation in France could frustrate pursuit of economic reforms, March 2022

France: credit outlook hinges on decisive post-election action on structural challenges, February 2022

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