France Faces Fresh Credit Warnings as Political Crisis Deepens
France is once again under pressure from credit rating agencies, which issued new warnings on Monday following the resignation of Prime Minister Sebastien Lecornu — less than a month after he took office. The move highlights the country’s deep political paralysis and its growing fiscal challenges.
Lecornu and his government resigned just 14 hours after unveiling their new cabinet, marking an unprecedented political setback. He served only 27 days as President Emmanuel Macron’s fifth prime minister in 21 months, making him the shortest-serving premier in modern French history.
The turmoil comes at a difficult moment for Europe’s third-largest economy, which faces a budget deficit nearly double the EU’s 3% limit and a debt-to-GDP ratio approaching 115%.
Rating Agencies Sound the Alarm
Fitch Ratings, which downgraded France to the single-A bracket last month, said the unstable political environment underscores the country’s limited ability to achieve meaningful fiscal consolidation.
Fitch warned that any failure to reduce public debt or persistent increases in borrowing costs could place further downward pressure on France’s credit rating.
Meanwhile, S&P Global maintained its AA- rating with a negative outlook, noting that France’s government spending — at 57% of GDP — is the highest among all countries it rates.
S&P added that the biggest challenge will be convincing France’s fragmented parliament to pass a budget that meets EU fiscal rules, particularly the 3% deficit limit.
Mixed Assessments from Other Rating Firms
DBRS Morningstar, which also downgraded France last month, emphasized that France still benefits from a large, diversified economy, strong institutions, and limited financial stability risks.
European-based Scope Ratings, which holds a negative outlook on France’s AA- score, pointed to the ongoing political instability as a key risk.
According to Scope’s lead analyst Thomas Gillet, President Macron now faces a tough choice: appoint another prime minister to attempt coalition talks or call new snap elections.
“The current political turmoil increases the risk of delays in approving the 2026 budget,” Gillet said, warning that it significantly limits France’s prospects for fiscal reform.
