France's riots hit markets. Here are 3 big questions facing investors
France faces economic uncertainty as civil unrest drives borrowing costs to their highest levels since 2002. Investors are concerned about the government's ability to meet fiscal deficit targets, with Moody's maintaining a negative outlook on the nation's credit rating.
Why it matters
The fiscal stability of the Eurozone's second-largest economy has significant implications for global financial markets.
France's unrest is fueling investor concerns over the country's fiscal outlook, after borrowing costs hit their highest level since 2002 earlier this week.
With further demonstrations planned, fund managers are assessing whether prolonged disruption could weaken growth, undermine confidence and make it harder for the government to deliver planned budget savings.
Rating agency Moody's on Friday kept its Aa3 credit rating on France, a level it still deems " high grade ," but maintained its negative outlook on the nation.
"The negative outlook reflects the increased risk that the fragmentation of France's political landscape will continue to impair the functioning of the country's legislative institutions," Moody's said in its report.
Moody's noted that it could return France's outlook to stable if its institutions can narrow its budget deficit.
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