(Bloomberg) — France’s credit rating was downgraded Moody’s Ratings after far-right leader Marine Le Pen toppled the country’s government in a dispute over deficit reduction.
Most Read from Bloomberg
In an unscheduled change, Moody’s lowered its assessment of the euro area’s second biggest economy to Aa3 from Aa2, three levels below the maximum rating. France has already been cut to equivalent levels by Fitch and S&P.
The decision “reflects our view that the country’s public finances will be substantially weakened over the coming years,” Moody’s said in a statement. “There is now very low probability that the next government will sustainably reduce the size of fiscal deficits beyond next year.”
The rebuke comes just hours after President Emmanuel Macron appointed Francois Bayrou as France’s fourth premier in a year. Bayrou’s predecessor Michel Barnier was ousted in a confidence vote last week after Le Pen’s National Rally lined up alongside left-wing parties to protest against his plans for narrowing France’s budget deficit.
Outgoing Finance Minister Antoine Armand said the downgrade reflects the recent parliamentary developments and uncertainty around the budget.
“The nomination of Francois Bayrou as prime minister and the reaffirmed will to reduce the deficit will provide