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France's euro exit debate could hurt other ratings in bloc - DBRS
February 13, 2017 / 2:13 PM / 10 months ago

France's euro exit debate could hurt other ratings in bloc - DBRS

LONDON (Reuters) - Ratings agency DBRS said on Monday that proposals from France’s far-right presidential hopeful Marine Le Pen to negotiate a process for countries to leave the euro zone could have implications for France’s rating and the bloc’s other members.

Marine Le Pen, French National Front (FN) political party leader and candidate for the French 2017 presidential election, attends the 2-day FN political rally to launch the presidential campaign in Lyon, France February 5, 2017. REUTERS/Robert Pratta

“Even if such a dialogue ultimately failed to yield results, open discussions on such a sensitive topic could encourage investors and bank depositors to move euros away from France, or any other country deemed likely to leave the currency union,” the Canadian agency said in a note.

“This development could have implications for France’s sovereign rating, and possibly other countries’ ratings.”

DBRS’ rating for euro zone countries Portugal and Italy is crucial as it allows the former’s bonds to be eligible for purchase by the European Central Bank (ECB), and allows cheap funding from the ECB for banks in the latter.

DBRS has maintained a triple-A rating on France since 2011.

Reporting by John Geddie, editing by Nigel Stephenson

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