PARIS Standard & Poor's on Friday affirmed France's long-term credit rating at AA and its short-term credit rating at A-1+ with a stable outlook, citing the government's efforts to improve the economy's competitiveness and reduce the public deficit.
The Socialist government on Wednesday signed off on a multi-year fiscal program that underscored its commitment to lower the public deficit to a European Union ceiling of 3 percent of gross domestic product by the end of next year.
"The French government has shifted toward policies to reduce labor costs and corporate taxation in order to improve the economy's competitiveness," the rating agency said in a statement.
"We think the French government will gradually decrease its budget deficit to less than 3 percent of GDP by 2017, thanks to expenditure savings, but that government debt levels as a share of GDP will likely remain high and continue to grow until 2017,"
The stable outlook reflected S&P's view that risks to France's credit worthiness were balanced and that there was less than a one-in-three probability of raising or lowering the ratings over the next two years.
(Reporting by Dominique Vidalon; Editing by Kim Coghill)