|S&P maintains French rating
(8 mins ago)
Rating agency Standard and Poor's on Friday maintained its rating for France at "AA'' with a stable outlook, welcoming a raft of new reforms but warning that targets were unduly optimistic.
"In our view, the French government has shifted toward policies to reduce labour costs and corporate taxation in order to improve the economy's competitiveness,'' S&P said in a statement, AFP reports.
The agency said it thought the government would manage to reduce the public budget deficit to less than 3.0 percent of annual gross domestic product by the end of 2017, but that debt would remain high and would grow up to 2017.
The date estimated by S&P for achieving the 3.0-percent deficit limit is two years later than the deadline of 2015, already delayed by two years, set by the European Commission
In early trading on Friday, the yield, or interest rate, on 10-year French bonds eased slightly to 1.997 percent from 2.009 percent late on Thursday.
On Wednesday, the new French Socialist Prime Minister Manuel Valls laid out a switch of economic policy with a program of measures to reduce the public deficit to the EU ceiling of 3.0 percent of output, saying that France was sticking to the EU deadline for this at the end of next year.
This 2015 target date was significant because in the preceding days French President Francois Hollande had indicated that under the new drive for reforms, France would angle to get extra leeway from the EU on the deficit timetable.
Valls, in his statement on Wednesday, also outlined a range of cuts to planned public spending to sit alongside a program to cut taxes on companies to raise competitiveness, exports and growth and reduce record unemployment.
This new policy direction to boost business and hold down the growth of public spending has raised strong opposition on the left of the Socialist Party.