Rating agency Moody's removed France from its top-ranking triple A rating. The downgrade came only days after President Francois Hollande had made a genuine policy 'U-turn' to restore the country's competitiveness. But the downgrades could accelerate if France cannot reform itself seriously and its financing abilities could become more problematic.

RATING agency Moody’s has downgraded the French sovereign signature from Aaa to Aa1, keeping its ‘negative outlook’ on France.

The agency based its decision on November 19, 2012, on ‘structural challenges’ including the loss of competitiveness, rigid labour market and fiscal imbalances.

France’...

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Dr. Emmanuel Martin
The measure attracting most comment is a 30 billion euro reduction in social contributions which are part of companies’ labour costs. This has to be paid for by increasing VAT and public spending cuts. This is similar to the ‘social VAT’ proposed by Nicolas Sarkozy during the presidential campaign
read more about it in the report
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  • Report is targeted to the decision makers in cross country manufacturing – suppliers, manufacturers, logistics.
  • Also considered useful for the administrative university facilities, to better understand the possibe effects of current decisions.
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