{
  "id": 16255555,
  "title": "France spared Moody’s rating downgrade as it struggles with unrest",
  "url": "https://urgent.news/2026/10/23/france-spared-moodys-rating-downgrade-as-it-struggles-with-unrest-16255555",
  "topic": "ai",
  "section": "AI",
  "published": "2026-10-23T23:31:11.000Z",
  "source": {
    "name": "Free Malaysia Today",
    "slug": "free-malaysia-today",
    "url": "https://www.freemalaysiatoday.com/category/business/2026/10/24/france-spared-moody-s-rating-downgrade-as-it-struggles-with-unrest"
  },
  "original_language": "en",
  "account": "Paris: Moody's spared France a credit rating downgrade on Friday, easing pressure on a government grappling with social unrest and fiscal challenges. Moody's concluded a periodic review of its rating, maintaining France's Aa3 ranking, which has been accompanied by a negative outlook since October last year. Bond markets had anticipated a downgrade, which would have aligned Moody's rating with those of Standard & Poor's and Fitch, who downgraded earlier due to France's struggles in controlling public finances following a 2024 snap election that resulted in a hung parliament and political deadlock. The French finance ministry stated that Moody's maintaining its rating underscored the credibility of the budget presented in the 2027 finance bill, aimed at restoring the country's public finances. However, the government faces difficulties in passing the bill, as opposition parties may reject the legislation and force a no-confidence vote. Moody's predicts a deficit-reducing budget for 2027 will be adopted, while financing costs and social tensions are expected to ease somewhat in the coming months. French borrowing costs already surpass those of lower-rated countries like Italy due to concerns over the budget deficit, the largest in the eurozone, and upcoming presidential elections on April 18 and May 2, where polls predict the far-right could win. Recent TV footage of weekend protests spilling into riots and looting highlights the political challenges of enacting budget cuts. This situation pushed the risk premium on French government debt above safe-haven German bonds to its highest level in 15 years on Thursday, with France's 10-year bond yield reaching 5.14%, the highest since July 2002. Earlier this month, Moody's noted that the government's ability to overcome fragmentation in parliament would be the decisive factor for its next rating decision. That task appears more challenging following violent protests over underfunded schools that escalated into riots during mass demonstrations against rising living costs. The government has resisted increasing school funding or raising the minimum wage, leading to further protests planned for Saturday. In parliament, the lower house has abandoned some key savings measures in the 2027 budget, which aims for a 5% deficit of GDP, compared to 5.4% this year. Opposition parties exhibit little willingness to compromise ahead of the election, scrapping some proposed cuts while adding additional spending. Portfolio manager Rushabh Amin of Allspring Global Investments advised waiting to see how the narrative develops over the next six months leading up to the election, as this will have a more significant impact on the spread. Pressure on French debt might intensify after the presidential vote if all three rating agencies, including Moody's, Standard & Poor's, and Fitch, downgrade France to BBB, just above junk status, potentially prompting sales by investors with rating limits, according to Mike Bell, head of market strategy at RBC BlueBay Asset Management.",
  "summary": "France has struggled to rein in its public finances after a 2024 snap election produced a hung parliament and political paralysis.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "France 24",
        "title": "France awaits Moody's verdict: Downgrade widely expected as debt fears grow",
        "url": "https://urgent.news/2026/10/23/france-awaits-moodys-verdict-downgrade-widely-expected-as-debt-fears",
        "published": "2026-10-23T13:10:24.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}