The Buzz

All markets and investing news all the time

Egan-Jones' downgrade du jour: France

June 14, 2012: 3:39 PM ET

Egan-Jones says the social policies of French President Francois Hollande could jeopardize the nation's credit.

Another day, another downgrade in Euroland.

Egan-Jones lowered France's credit rating one notch to "BBB" from "A" on Thursday.

The ratings agency pointed to France's rising debt and slowing economic growth. It also warned that France is fond of subsidizing its banks, which could prove costly for the government.

In a subtle turn of phrase, Egan-Jones summed up the situation in France thusly: "Disastrous trend and the worst has yet to come."

While France has been able to borrow at affordable rates in the bond market throughout the crisis, Egan-Jones expects investors to begin demanding higher interest rates to lend money to Paris.

That could make it harder for Francois Hollande's Socialist government to make good on its campaign promises, the report said. Hollande has pledged to roll back the retirement age and raise the minimum wage, among other politically expedient policies.

The move comes one day after Egan-Jones downgraded The Kingdom of Spain. A few hours later, Moody's announced its own downgrade of Spain, without mentioning the kingdom part.

Join the Conversation
Fear & Greed
Sponsored by
About This Author
Ben Rooney
Ben Rooney
Staff writer, CNNMoney

Ben Rooney is a staff writer for CNNMoney. He covers the European debt crisis and other international finance stories, in addition to writing about stocks, bonds, investing and other Wall Street-related news. Follow Ben on Twitter: @ben_rooney

To view my watchlist

Not a member yet?

Sign up now for a free account
Stupid Stock Move of the Day
#StupidStock Move of the Day! Yes, Urban Outfitters may be finally turnings things around. But $URBN up 17%? Seems a bit excessive, no?
Most Popular
Powered by VIP.