France will retain its top-notch AAA rating grade because it is cutting new borrowing and boosting growth with reform policies, French Economy Minister Christine Lagarde said in an interview published on Sunday. Lagarde told Der Spiegel news magazine that as long as she is in office France will maintain its AAA rating.
When asked if she feared France might soon lose the top rating, Lagarde said: "You're barking up the wrong tree. As long as I'm in this office France will not give up this status.
"We're doing a lot for that. We've got our budget in order and are reducing new borrowing. We're pursuing hard reform policies that are raising growth." With the worst deficit and debt ratios among the Aaa-rated countries in the eurozone, market speculation has arisen in recent months that France could lose its top grade this year, even though many analysts consider that prospect remote.
Despite a record level of debt and rock-bottom interest rates, France has had no trouble finding sufficient buyers for its government bonds over the last year.
France's public deficit is set to hit 7.7 percent of gross domestic product (GDP) in 2010, and the government aims to cut the gap to 6 percent by the end of 2011 as a first phase of a plan to trim it to a European Union limit of 3 percent in 2013.