A global credit ratings agency downgraded French debt worthiness a notch on Saturday, citing pension reform protests as a cause. Two weeks after the contested reform passed, persistent social movements threaten to erase the financial gains that the French government expected.
As Nantes squared off against Toulouse on Saturday evening for the hotly anticipated French Football Cup finals, most of the action was restricted to the field. French trade unions had promised a stormy reception for President Emmanuel Macron, who typically greets players of both teams on the pitch before the match kicks off.
They had planned to disrupt the match by handing out red cards and whistles to spectators.
“The French Football Cup final isn’t a Roman gladiator game,” government spokesperson Olivier Véran told French TV channel BFM on Friday.
“Unions can’t use their imperial thumbs down to decide who should boo the president,” he said.
Sidestepping fears of a hostile reception following his hugely unpopular pension reform, President Emmanuel Macron shook hands with players in the tunnel before the game, which played out rather peacefully.
3,000 police and gendarmes were posted around the stadium. Disapproval from French unions is no surprise given the current context. An “imperial thumbs down” by a global credit ratings agency, however, came as more of a shock.
A thumbs down for France’s economy
On Friday, credit ratings agency Fitch cast a shadow on France’s economy by downgrading its debt worthiness from “AA” to “AA-", saying recent social and political pressures around the pension reforms will “complicate fiscal consolidation”.
“The decision [to pass the reforms] has led to nationwide protests and strikes and will likely further strengthen radical and anti-establishment forces,” said Fitch. The current situation could also “pose a risk to Macron’s reform agenda and could create pressures for a more expansionary fiscal policy or a reversal of previous reforms", the agency wrote.
An ironic outcome, since the French government partly justified their decision to push through the contested pension reforms as a way to avoid fiscal deficits and debt downgrade.
In an interview with French daily Le Parisien in December 2022, Prime Minister Élisabeth Borne warned that if nothing were done to slow France’s deficit, over a hundred billion euros of additional debt would go to the pension system in the next ten years.
Now it seems the political deadlock and social movements, both consequences of the pension reforms, are putting France in an economically fragile position.
Finance minister Bruno Le Maire was quick to dismiss the new rating shortly after it was published.
“I believe that the facts invalidate Fitch’s assessment. We are able to implement structural reforms and we will continue to implement structural reforms for the country,” he said.
He continued by dismissing the concerns about the government’s direction. “Do not doubt our complete determination to restore the nation’s public finances,” he said, adding that France has proven its ability “to pass reforms that transform its economic model". He also promised to accelerate debt reduction, cut down deficit and make quick cutbacks on public spending.
President of the National Assembly’s Finance Committee Éric Coquerel, who is a member of the leftwing France Unbowed party, mocked the ratings and tweeted that “even referees of the financial market are giving Macron a red card for his pension reforms!”
Ignoring red cards
But without an absolute majority in parliament, it will be difficult for Macron and his government to push through their ambitious reform plans. It already is.
Due to a lack of support from MPs, Prime Minister Élisabeth Borne has already decided to postpone introducing plans for a new immigration law until the autumn, for example.
And Macron, along with other members of his government, has faced fierce opposition from the French population since he pushed the pension reforms through. Wherever they are, turmoil seems to follow.
On Thursday, protesters loudly banged pots and pans near the Fort de Joux castle on the border with Switzerland, where the head of state was to make a speech.
That same day, hundreds of employees of state-owned electricity company Enedis parked their electric blue company cars outside the gates of the iconic Versailles Palace, former seat of the French monarchs, in a symbolic action.
The rallies set to take place this Saturday for the French Football Cup final are just the latest attempt to disrupt a visit from President Macron.
The biggest red card yet to be shown, a major “imperial thumbs down”, will take place this coming Monday May 1. Unions have vowed to make Labour Day a “massive” and “popular” demonstration against the pension reforms, unheard of for nearly 15 years.
