Positive effects of reforms on the economic situation of France

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Tomorrow, France could borrow even more cheaply on the markets. The quality of the French stateโ€™s credit rating should indeed improve following the upgrade by Standard & Poorโ€™s of the countryโ€™s credit outlook, which moves from โ€œnegativeโ€ to โ€œstableโ€.

Good news is not so frequent for the government, so obviously this upgrade by the rating agency, which was the first to downgrade France’s AAA sovereign rating, pleases the executive!

Because it is indeed the reforms implemented by the government that are being praised by S&P. โ€œThe enactment of the El Khomri law in August 2016, as well as the Macron law, will, in our opinion, help to support Franceโ€™s competitiveness by partially reforming regulated professions,โ€ explains the agency.

Difficulty of implementation

These two texts were particularly difficult to implement for the government โ€” one will particularly recall the very intense social movement in the spring against the labor law. โ€œThe reforms undertaken are paying off since all the rating agencies are now confident in Franceโ€™s prospects,โ€ rejoices the Minister of Economy, Michel Sapin.

For S&P, these reforms are likely to produce โ€œstabilizing effects on employment, growth, competitiveness, and public financesโ€.

Standard & Poorโ€™s joins the chorus of other agencies which have also upgraded their outlook to โ€œstableโ€. This should further improve the countryโ€™s situation in the debt markets; the state will be able to borrow even more cheaply.

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