A credit rating agency downgraded French debt, while another upgraded Italy’s, in another sign that Europe’s traditionally strong economies are on a worrying path compared to some of their historically weaker neighbors.
Following a fresh round of political turmoil over a protracted budget crisis in France, S&P said uncertainty over public finances remained high.
Meanwhile, DBRS Morningstar said improvements in Italy’s banking system have made it a safer bet. The change should not be overstated — Italy still has a higher debt-to-GDP ratio than France — but the two are on opposite trajectories. Italy, Greece, Portugal, and Spain have all grown faster than Eurozone giants France and Germany in recent months.
