France's new prime minister gets a baptism of fire after surprise Moody's downgrade

Group 1 - France's credit rating was downgraded by Moody's from "Aa2" to "Aa3" due to concerns over political fragmentation, impacting the country's ability to address its budget deficit and debt [1][2] - The downgrade has led to negative market reactions, with France's CAC 40 index falling by 0.7% and the yield on the 10-year government bond trading at 3.03%, closely trailing Greece's yield of 3.09% [3][4] - Political instability in France has been exacerbated by indecisive parliamentary elections and the recent fall of Prime Minister Michel Barnier's government after just three months [5][6] Group 2 - The new Prime Minister Francois Bayrou, appointed by President Emmanuel Macron, faces the challenge of addressing France's significant debt, projected at around 112% of GDP in 2024, and a budget deficit expected to reach 6.1% this year [7]