Moody's: France Snap Elections Risk to Credit Rating

Moody's warned of the negative repercussions of holding early parliamentary elections on France's credit rating.

Moody's said in a statement, Monday, that "these early elections enhance the risks facing financial consolidation," and described it as "negative credit " for the country's current rating at (Aa2), which is one notch higher than its rating with Fitch and S&P.

The statement explained that “potential political instability represents a credit risk given the difficult financial conditions that the next government will inherit,” adding that the current “stable” outlook for the French economy could be reduced to “negative” if its debt indicators worsen.

French President Emmanuel Macron called on Monday for early legislative elections after a painful loss in the European Parliament elections at the weekend to the far-right party led by Marine Le Pen.

The elections are scheduled to be held on June 30, less than a month before the start of the Olympic Games in Paris, with a second round being held in July.