S&P’s decision to put the triple-A ratings of Finland, France, Germany, Luxembourg and the Netherlands on a negative outlook in December brought angry responses from the French and German governments.
The decision precipitated a memorable outburst by Christian Noyer, the governor of the Central Bank of France, who argued that the UK deserved to be downgraded before France due to its weaker economic fundamentals. His comments focused attention on the comparative states of the French and British economies amid the intensification of the crisis in the eurozone.
In Euromoney’s Country Risk Survey, France has consistently received higher (ie less risky) scores from economists than the UK across a range of economic and political indicators, suggesting that the views of analysts are largely supportive of M Noyer’s comments.
Euromoney asked two expert members of Euromoney Country Risk (ECR) for their opinion on whether France or the UK has the more deserving case to retain its triple A rating.
Nicholas Spiro, managing director, Spiro Sovereign Strategy:
Panicos Demetriades, professor of financial economics at the University of Leicester: