France

French downgrade unjustified, IMF chief economist

International Monetary Fund's chief economist Olivier Blanchard in 2012
International Monetary Fund's chief economist Olivier Blanchard in 2012 Reuters

Standard & Poor's downgrade of French sovereign debt was "unjustified", the International Monetary Fund's (IMF) chief economist said Tuesday.

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Olivier Blanchard said that he saw no substantial risk that France would not be able to service its debt.

Dossier: Eurozone in crisis

France significantly reduced its public deficit last year, he pointed out.

In the daily Süddeutsche Zeitung, the IMF's chief economist also came to the defence of Germany and its high current account of surplus, which is under fire from European and US partners.

Germany could do more for its European partners, Blanchard said, by supporting the European Central Bank's monetary policy to set up a banking union, rather than reducing its surplus. 

Earlier this month, the credit rating agency S&P cut its rating on French sovereign debt for the second time in two years, taking it down one notch from AA+ to AA.

Eleven countries are still rated AAA.

Germany and the Netherlands figure among them.

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