Moody’s Ratings cut France’s credit outlook to negative from stable, adding to warnings on the country’s bloated public finances as a weakened minority government struggles to pass a budget.
“The decision to change the outlook to negative reflects the increased risk that the fragmentation of the country’s political landscape will continue to impair the functioning of France’s legislative institutions,” the firm said in a statementBloomberg Terminal on Friday. “This political instability risks hampering the government’s ability to address key policy challenges such as an elevated fiscal deficit, rising debt burden, and durable increase in borrowing costs.”