Fitch Affirmed France at AAA; Outlook Revised to Negative
On Friday, Fitch Ratings affirmed the senior debt on the country of France at "AAA", however, revised the country's long-term rating outlook to negative from stable.
There has been much speculation within the prior month saying that France would lose its perfect rating. However, according to Fitch, France will not be downgraded.
Fitch stated, "the affirmation of France's 'AAA' status is underpinned by its wealthy and diversified economy, effective political, civil and social institutions and its financing flexibility reflecting its status as a large benchmark euro area sovereign issuer. In addition, the French government has adopted several measures to strengthen the creditability of its fiscal consolidation effort."
Fitch revised France's long-term outlook to negative because of heightened risk of "contingent liabilities" coming from the deteriorating economic situation throughout the Euro Zone. In Fitch's analysis, they say that France is the most exposed AAA-rated country to Europe's financial crisis.
Fitch concluded its report with, "In the absence of a material adverse shock, most likely associated with dramatic worsening of the Eurozone crisis, Fitch would not expect to resolve the Negative Outlook until 2013."
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