The decision by Standard & Poor's to maintain France's financial rating, though under negative watch, is a relief. Given the current rise in interest rates and the ballooning cost of our national debt, which is set to become the government's largest budget item, any further increase in our borrowing costs could be disastrous. This year, the French Treasury plans to borrow a staggering 285 billion euros—a record high.

A stable financial rating, even with a negative outlook, is still a positive sign. But how long can this last?

Dark clouds are gathering over the French economy: according to the National Institute of Statistics and Economic Studies (INSEE), the country's economic activity shrank by 0.1% in the third quarter, revising down its initial estimate of a modest 0.1% GDP growth. This might seem minor, but it implies that if the last quarter of 2023 also shows negative growth, France will technically enter a recession.

Another major concern is the state's deficit, which has reached a historic high of 178 billion euros. A deficit means more borrowing.

Additionally, from July to September, household consumption and investment were much weaker than previously estimated by INSEE. There are stormy skies on the horizon.

A key driver of French growth, consumer spending, is showing worrying signs of weakness. In October, household consumption expenditures fell by 0.9%, following relative stability in September. Even though inflation is easing, food consumption dropped by 1.5% in October after a rebound in September. Energy consumption continues to decline: down 2.5% in October following a 1.3% decrease in September.

It's hard to believe that with faltering consumption, a recession in Germany, and dwindling French growth, unemployment will decrease. Recent official figures show an uptick in the unemployment rate. Achieving full employment by 2027 (5% unemployment), a goal set by President Emmanuel Macron, seems increasingly challenging. "Wake up, we're at 7% unemployment," the President told entrepreneurs, signaling panic and an admission of weakness.