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Ratings firm Moody’s warned of a downgrade of French debt, saying the move could worsen France’s finances by creating “a polarized political environment. “
By Liz Alderman
Report from Paris
Investors made clear on Tuesday the extent of their concerns about President Emmanuel Macron’s bid to call new elections in France, raising the country’s borrowing costs, driving down inventory costs and prompting ratings firm Moody’s to warn that it could downgrade French sovereign debt as a result of risk. political instability.
Macron’s dissolution of the reduced space in parliament on Sunday, after his party was defeated by Marine Le Pen’s far-right party in European Parliament elections, raised concerns about the possibility that the government could find itself in a bind. The unrest has drawn attention to the fragility of France’s finances and the prospect of a legislative impasse that could undermine the government’s ability to deal with it.
“This resolution will alleviate the difficult economic situation facing the country,” Philippe Ledent, senior economist at ING bank, wrote in an email to clients. Public finances and the functionality of the French economy will be “at the center of the election campaign. “Added.
While the leader of France’s conservative party on Tuesday called for an alliance with the right to push back Macron ahead of two rounds of national voting starting on June 30, investors punished French stocks, sending the Paris Stock Exchange down 1. 33 percent. , after a sharp drop on Monday.
The yield on 10-year French government bonds rose sharply for a second day amid investor concerns about France’s ability to manage its finances. Bond yields are indicative of the government’s borrowing costs, and higher securities would make it harder to stimulate the economy and manage the country’s debt.
France suddenly finds itself facing uncharted territory. The prospect that Le Pen’s party, the National Rally, could triumph in the parliamentary elections called, which could weaken Sánchez’s control over the Rassemblement de l’Ivoire. Macron applies force and, in all likelihood, forces him to govern with a prime minister. of their political opposition: dangers that lead to economic havoc. at the most sensible point of the political balance.
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