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The deterioration of the Spanish note and doubts about the French note resurface critics are against the rating agencies. Decryption in four points. Moody's in New York.

Rating agencies are again talking about them. After the decision by Moody's to consider placing the French note on negative watch, the issue of their decision-making arises. Back to agencies in four points.

How Does it take decisions?

This is the work of two people in the agency, "managing director" and the analyst in the country studied. They bring together a panel of several analysts (5 to 12 people), and a majority vote following a debate on the prospects of the country. The evaluation criteria focus on four principles. First results with the economic analysis of per capita GDP.Then they evaluate the level of indebtedness of the country with the analysis of public debt relative to national wealth. Third criterion, political strength of a country, a test that was particularly important when Standard and Poor's downgraded the United States in battle between Democrats and Republicans. Finally the agency is studying the history of default of the country. "Their decision is not from a macroeconomic model as is the case for the projections of the ministries or central banks. This is more of a qualitative opinion.Countries are alerted to the decision a few hours before it was released, "said Bertrand du Marais of the University of Nanterre on Slate.

Read: Why France must not lose its triple A

France, she deserves to be degraded?

Moody's decision to consider the placement of the note falls under supervision of course, not abuse. The situation of public accounts in France is worrying. With debt levels at 1.692 trillion euros (86.2% of GDP), Paris is – the 17 countries rated AAA by Moody's – one of the states with the most fragile public finances. The United States, degraded this summer by Standard and Poor's are worse (100%) but investors remain attracted by the U.S. debt. Furthermore, the primary deficit of France off the debt burden reached 3% of GDP, far more than its neighbors triple A rated, the Netherlands (1.6%) and Austria (0.5%).It is these figures that the agency emphasized. Moody's said the financial strength has "weakened (…) because the economic and financial crisis worldwide has led to a deterioration in its debt ratios that are among the most vulnerable countries rated AAA." That said, nothing to panic about the likely reduction of the note according to Alexandre Delaigue, an economics professor at Saint-Cyr and co-author of the blog econoclaste. "Overall, the consequences (a degradation) would be minimal because in fact the creditors have already as if France had already lost its best."

Also read: What I really want the rating agencies

And also: Credit rating agencies for Dummies

Why do we critique always agencies?

For several reasons. First, because they have made many mistakes in the past.After controversy over the rating of companies, including Enron, they were accused of having had a major responsibility in the crisis of suprime, giving the maximum for certain financial products that eventually led to the financial crisis. Moreover, they were criticized for their lack of transparency about the products noted. A former employee of Moody's recently revealed that some banks had withheld information to be rated by these agencies.

Today's critics include on Moody's. The agency would degrade too quickly some states. "Moody's has totally missed the Greek crisis and the subprime crisis. We realize that with Italy and Spain it is trying to change this image agency late. But it is clear that it is too brutal "said Norbert Gaillard, author of" rating agencies ".

How to reform?

Europe has raised the idea of ​​creating a European rating agency. The goal is to break the virtual monopoly of the three agencies, Standard and Poor's, Moody's and Fitch. But it would not address the accusations of bias, is Gunther Capelle-Blancard, professor at the University of Paris 1 Panthéon-Sorbonne and Deputy Director of CEPII. "The doubts about its independence would be very strong. The proof now European leaders are trying to put pressure on agencies that do not have the figures for Greece in such a negative." Norbert Gaillart advocates for its intervention by the European Central Bank. "The ECB should be the sovereign rating. It would do this based on his notes to her and this would allow it to be more independent rating agencies."

Read also: The European rating agency, such a good idea?

Moody's is given three months to determine whether his perspective "stable" on "AAA" tricolor is still justified. The rating agency said that financire the financial strength of the French government has weakened. The Minister of Economy and Finance Baroin presented Wednesday, September 28 in Council ministresle of the state budget for 2012.

The rating agency Moody's Investors Service gave the first Monday penknife to the sacrosanct "AAA" rating of France, announcing that it gave three months to determine whether his perspective "stable" was still justified in view of the deteriorating economic situation."Over the next three months, Moody's will monitor and evaluate the stable outlook (the note of the country) in the light of progress made by the government to implement" the measures announced to reduce the budget deficit, said the agency rating in a statement.

France has currently the highest rating possible from Moody's (a "Aaa"), as from its main rival Standard & Poor's and Fitch Ratings. This high rating allows it to borrow on the markets in very favorable terms to finance its budget deficits. If the prospect of this note should be revised to "negative", this would imply that Moody's would likely reduce the medium-term (usually for a term of three to twelve months).And France would become the new big country, after the United States to lose the precious talisman financially.

The agency is careful to note that this review is part of its annual study on the accounts of France and that it is not – at this stage – a decision on the note country. But it is the first of three major rating agencies and to cast a shadow on the "Aaa" French. Last week, Moody's had yet to confirm the strength of the French note, after the announcement of the restructuring of the bank Dexia.

Keeping the promise of deficit reduction

In addition to the ability of the French government to meet its budget commitments, Moody's says it will consider in its deliberations "new negative developments in the economy or financial markets."In its statement, Moody's notes that the financial strength of the French government, although still very high, "has weakened, as is the case for other countries in the euro area, as the economic and financial crisis in the world has led to a deterioration in its debt ratios, which are now among the lowest rated countries Aaa + + ".

For Moody's, so it is "crucial" for France to maintain "investor confidence in its ability and willingness to deal with unforeseen challenges."Or "France could face a number of challenges in the coming months – such as the need for additional support to other European countries or its own banking system, which could increase so significant commitments that must support the country's budget, "said Moody's.

"The deterioration of debt ratios and the ability to see new potential liabilities are putting pressure on the prospect of stable rating Aaa + + of the country," said the agency. For Moody's, the French government now less room for maneuver in 2008 (…) "during the crisis of" subprime "." The continued commitment to implement economic reform measures and budgetary and visible progress in the goals "for reducing debt" will be important for maintaining the stable outlook "of the note of the country, the agency warns.

Orders for durable goods in the United States have increased significantly more than expected in July, according to official statistics issued Wednesday.

The U.S. Commerce Department reported a 4.0% increase in orders in July after a decline of 1.3% (revised from -1.9%) in June

Analysts polled by Reuters on average expected a 2.0% increase.

The strong demand for airplanes and automobiles brought the statistics. Orders for transportation equipment included jumped 14.6%, their largest increase since January.

Excluding transportation, the increase was 0.7%, while the consensus expected a decline of 0.5%, following growth of 0.6% in June (revised from 0.4%).

Excluding defense, a 4.8% increase was announced, the highest since September 2010.The consensus was 3.2% after falling 0.9% the previous month (revised from -1.6%).

The index contracts on Wall Street have erased their losses as soon as these figures and bond markets have exacerbated their losses (in Europe) or erased their gains (the U.S.).

Orders for durable goods are considered a leading indicator of manufacturing activity in the United States.

The U.S. recovery has been fueled mainly by the manufacturing activity, but the fall in equity markets has affected both business and consumer confidence.

The aviation sector has supported the durable goods orders in July with a 43.4% jump in aircraft orders, which makes you forget the 24% decline in June

Boeing said on its website had received 115 aircraft orders, against 48 the previous month.

Orders for motor vehicles rose by 11.5%, their biggest increase since January 2003. They had increased by 0.1% in June

This improvement suggests that the effects of the earthquake of March 11 in Japan on the automotive industry are beginning to dissipate.

Lafarge announced on Wednesday the sale to the Australian Boral its stake in their joint venture equally in the plaster in Asia worth 429 million euros as part of its debt.

The world cement continues its withdrawal from the plaster, the smallest of its three businesses, in February after setting an ambitious target of over two billion euros of debt, half by reducing the dividend, and for other by a decline in investment and new divestitures.

Final completion of the sale of its share of Lafarge Boral Gypsum Asia (LBGA) expected before the end of the year, Lafarge said in a statement.

The price of EUR 429 million represents the value from Lafarge LBGA.Excluding debt and minority interests, the price stood at 380 million euros.

Founded in 2000, LBGA conducted last year in sales attributable to the group of 181 million euros and EBITDA of 31 million.

Lafarge had already announced July 22 the sale of its gypsum in Australia in its German competitor Knauf for a net worth of 120 million euros, ten days after entering into exclusive negotiations with the Belgian Etex plaster to give up his European and South America, for a net amount of 850 million euros.

With these assignments, which follow the cement and concrete assets in the United States announced in May, Lafarge will far exceed the target of disinvestment of 750 million euros it has set for 2011.

The group's debt, inherited largely from the acquisition of the Egyptian Orascom in 2008 reached 14.3 billion euros at the end of June.

Moody's announced on August 5 lower the debt rating of Lafarge Cement in the speculative grade, five months after a similar decision by the Standard & Poor's.

Paris and other European stock markets have violently turned down by mid-afternoon after the surprise announcement of a slowdown in manufacturing activity in the United States in July.

Relieved in the morning by the Agreement on raising the ceiling of the debt of the United States intervened in extremis Sunday, equity markets find their fears about sovereign debt in favor of reports that Cyprus is a member of the euro area, could appeal to the European aid scheme like Greece, Ireland and Portugal.

Around 17:00, the CAC 40 index lost 1.81% to 3604.86 points after going under 3,600 points and touched a low of 11 months at 3590.11 points.Since the beginning of the CAC 40 lost 5.44%.

London lost 0.25%, 1.78% Frankfurt. Of the European indices, the EuroStoxx 50 loose 1.99% and 0.71% Eurofirst 300. Milan fall of 2.9% Madrid 2.5%.

On Wall Street, indexes have also turned down after the ISM manufacturing index, as they had opened with a gain of about 1%, reflecting investor relief after the compromise reached on U.S. debt.

"The ISM manufacturing index shows that there is no sign of recovery in the U.S.," said James Knightley, economist at ING Financial Markets.He believes that the decline in the employment component of the index does not bode well for a monthly report on employment on Friday.

The same causes produce the same effects, the increase in risk aversion has favored states' obligations rated in the euro area, which were down in the morning.The performance of the 10-year German Bund, the euro area refer Germany, which was above 2.6% in the morning, fell to 2.48%.

The financial market vectors, contribute significantly to the decline in Paris, as the two heavyweights of the index, Total (-1.79%).

BNP Paribas 1.91% and

Societe Generale 3.57%.

Veolia Environnement (-4.87%) remains the largest decrease in the CAC 40, continuing to bear the brunt of its warning on its results after Friday down 9.5%. Oddo Securities and Goldman Sachs lowered Monday particular their recommendations and price targets on the title. and

The euro declined and traded around 1.4237 dollars against 1.4382 dollars in early trading.

Veolia Environnement announced Friday that it would implement new measures for restructuring, conduct a redeployment of its activities and asset sales, which led him to abandon his goals.

The world leader in environmental services said in a statement that such measures would cause it to recognize in its accounts at June 30, asset impairments and provisions for a total amount that should be about 800 million euros.

The new measures announced Friday are dictated by the "latest developments in operations in southern Europe, particularly Italy and North Africa and the United States, particularly in a specific activity of cleanliness," said Veolia, without wanting to give further details.

The group added that for 2011, it will not achieve its growth target of net profit and he expects a recurring operating income excluding Veolia Transdev slightly lower at constant exchange rates compared to the recurring operating income published in 2010.

Previously, Veolia was a growth in recurring operating income by 4% to 8%, excluding merger with Transdev in transport.

The objectives of organic growth of activity, reduce the cost of 250 million euros on sales of 1.3 billion and free cash flow positive after dividend payments, however, are confirmed.

Veolia, which has particularly suffered from lower volumes of waste treated during the crisis, announced that he "will detail the steps to refocus and improve profitability" in the publication of the interim, on August 4.

It also indicates that the amount of sales and partnerships made during the first half exceeds one billion euros and releases capital gains above 400 million for discontinued operations.

The European Financial Stability Fund (EFSF) provide for Greece, Ireland and Portugal the lowest rate loans for periods at least double, according to draft conclusions of the Summit of Heads of State and Government the euro area held Thursday in Brussels.

According to the document that Reuters was able to consult, the maturity of the loans will be extended from 7.5 years at least fifteen years, while interest rates will be lowered to about 3.5%, against around 4 , 5% today in the case of Greece and Portugal.

"We will provide loans to EFSF interest rates equivalent to those of the ease of using the balance of payments (currently approximately 3.5%) without falling below the cost of financing the EFSF" can we read in the project.

"This will be accompanied by a mechanism that will ensure appropriate incentives for the implementation of the program, including if necessary through collateral arrangements," the document, responding to requests by Finland on collateral to make for new credits.

The EFSF will also be allowed to provide preventive lines of credit to any country in the euro area, including those that are not subject to an assistance program of the European Union or the International Monetary Fund (IMF).

The paper added that discussions with the private sector participation in the second bailout of Greece is continuing and that all options are considered in the study.

"The financial sector has shown its willingness to support Greece on a voluntary basis through a list of options (exchange of debt rollover and redemption) on terms comparable to the support of public debt with the guarantee associated with higher credit "reads the project.

The EFSF was established in June 2010 to ensure the soundness of the single currency by giving states troubled loans guaranteed by member countries of the euro area.

PPR announced Monday the launch of a capital increase reserved for Group Sowind after which it will become the majority shareholder of the company with 50.1% of the capital.

Sowind Group, one of the few independent Swiss watch manufacturers with a presence in 60 countries including the brands Girard-Perregaux and JeanRichard.

PPR, which already held 23% stake in the company did not specify the amount of the transaction.

"This allows the Luxury Goods division of PPR to strengthen the segment of the luxury watch while supporting the international development of Sowind Group," said the French group in a statement.

PPR CEO François-Henri Pinault, became president of Sowind Group alongside Mailander Monica Macaluso, vice president.

Nicolas Sarkozy has compiled Monday an initial assessment of future investments made since 2010. Of the 35 billion euros announced, 20 will be released by the end of the year. The President of the Republic, Nicolas Sarkozy, held Monday, June 27, 2011 at the Elysee Palace press conference on the large loan. What is already this big loan?

Two years ago, almost to the day, Nicolas Sarkozy announced at the Congress meeting in Versailles on the launch of a major domestic borrowing costs dedicated to the future. It was presented as a way to circumvent the lack of fiscal room for maneuver. At the time, still a great lack of clarity regarding the loan. Of the amount, first of all – the press are evoked from 80 to 100 billion euros. On the terms then – initially, Nicolas Sarkozy planned to use the savings of the French.Suddenly, the head of state had created a committee to floor on the subject, chaired by Alain Juppe and Michel Rocard, which made its trade-offs in December 2009. The construction of this great loan, whose amount is ultimately that of 35 billion euros, was launched in 2010. This is a first assessment of this investment policy for the future has drawn Nicolas Sarkoy Monday.

How is it funded?

The idea of ​​borrowing from the French was quickly forgotten, because the cost to the state would have been too high. So with the markets that France has lifted the 35 billion euros. Finally, exactly 22 billion – 13 billion remaining from the repayment of loans to French banks during the financial crisis. Note that this loan did not happen at once.In addition, one third of these expenses are loans and guarantees, and are therefore not included in the deficit under maastrichien. As a result, the impact of this large debt on public finances is relatively limited: it should increase the deficit by 0.6 percentage points of GDP in 2010 and by 0.1 point in 2011, according to a Senate report.

Where is the money?

Of the 35 billion announced, twenty have been committed by the end of 2011, Nicolas Sarkozy announced Monday. The majority of this money will be invested in higher education (11 billion) and research (7.8 billion). 100 projects "laboratories of excellence" have already been selected and will receive three billion euros. Will also be created research institutes and technology (IRT) and eight campuses of academic excellence with global ambitions.SMEs sectors, aerospace vehicles, rail and sea in turn reap 6.5 billion, the digital 4.5 to generalize the high speed internet, and sustainable development 5 billion, including the development of a fourth-generation nuclear reactor. But shifts are possible. Nicolas Sarkozy has opened a new site Monday, asking the Government on the funding floor of a university hospital Institute (IHU), whose research is focused on cancer.

How were the projects selected?

The method used was that of "selection" because "nothing would have been worse than ineffective piecemeal," said Nicolas Sarkozy. The projects have been awarded after international competitive bidding. In the end, "it is nearly 1,500 projects that have been filed, often involving public-private partnerships.Never has there been such emulation in France ", welcomed the President of the Republic. But there was of course disappointed that only 396 projects have yet been selected. And 1 700 companies have received financial support.

What are the consequences for the French economy?

These investments are structured with the five-year major reforms: autonomy of universities, Grenelle of the environment, research assistance via private research tax credit … The 35 billion of the state are also a lever which will allow to bring the total investment for the future to "60-65000000000 through co-financing companies and local communities," said Nicolas Sarkozy Monday . According to the government, and large loan could boost French growth of 0.3 percent of GDP a year for ten years. Diagnosed as not shared by all parliamentarians.The Senate Finance Committee for its part considers that the gain in growth will be less than 0.1 percent of GDP a year.

Benoît Hamon, spokesman for the PS, for his part said Monday that the loan would be a great "little impact" on the economy. He said "it does not even succeed to compensate for the reduction of long-term funding." "Last year, the CNRS has seen its funding reduced by 10%," he said. He also recalled that for the universities, were used only the interests of 8 billion euros invested 8 billion, not themselves.

Bruno Le Maire called "historic" agreement signed Thursday between the agriculture ministers of the G20 on the fight against the volatility of prices of agricultural products. Industry players are skeptical. The French Minister of Agriculture, Bruno Le Maire, welcomed the agreement reached by the G20 to control the volatility of agricultural prices

The twenty most powerful economies in the world reached an agreement Thursday, June 23 in Paris on an action plan to fight against the volatility of agricultural prices. "Today is a great day, we reached an historic agreement", welcomed the French Minister of Agriculture, Bruno Le Maire. The day before, Nicolas Sarkozy had made the regulation of agricultural markets one of the workhorses of the French presidency of the G20.

It says the agreement

Produce more and better: G20 members recognize "the importance of a significant increase in the production and agricultural productivity" considering "the sustainable use of natural resources." The final declaration calls for the resumption of investment (public and private) in this area to "meet the challenge of growing demand." Among the concrete measures envisaged, the G20 will focus on research into the wheat genome, the most widely consumed grain in the world.

More transparency on stocks: to facilitate this information, an "information system on agricultural markets" (AMIS) will be established. This database will be placed under the authority of the FAO (United Nations Organization for Agriculture and Food).It will be complemented by a satellite surveillance system on agricultural production which will also monitor the effects of climate change.

Better international coordination: the G20 has decided to create a "Rapid Response Forum" which will aim to promote "policy coherence and coordination in times of crisis." This device is not to reproduce situations like last summer when Russia, a victim of drought and many fires, established an embargo on exports of wheat, leading to a surge in market prices.

Reduce the effects of price volatility: this provides a toolbox of risk management in agricultural and food security for developing countries.It "invites" the WFP (World Food Programme) to develop a pilot project for the implementation of emergency humanitarian food supplies in developing countries.

Fight against financial speculation: the G20 ministers recognized "the need to develop markets for agricultural raw materials for new operating rules" to fight against "market abuse and manipulation cross." They encourage "strong" finance ministers of the G20, which should be reflected in the fall, "to make appropriate decisions to improve regulation and supervision of agricultural markets" including through "position limits".

Observers believe that this

An advanced …

"We have achieved results beyond our expectations to meet the growing demand for food," a short, diplomatic, Director General of the United Nations Food and Agriculture Organization (FAO) Jacques Diouf . "For the first time, the industrialized countries of the G20 have agreed on a roadmap for the future of agriculture, with a genuine desire to develop regulatory tools, told L'Expansion . com Beulin Xavier, President of the FNSEA, the first agricultural union in France. In this sense, it is a historic agreement. The initiative of France has been heard. "

… considered too conservative

Many NGOs, however, believe that progress is a Thursday "agreed to minimum."NGOs and analysts doubt such as China and India without being forced to provide information on inventory levels and production, while there were far refused, considering that they are critical data. "Everything is based on the willingness of states to get around the table. But without constraint, states will not act against the long-term price volatility. These measures are likely to remain a dead letter," suggests Maureen Jorand, responsible power Agriculture and CCFD, a Catholic NGO that fights against hunger in the world.

"We have agreements in principle on many points, but no action figures or detailed, such as public investment to produce more and better comments for expansion. Com Christian Pees, president of the cooperative Agricultural and founding member of Euralis Momagri, think tank that advocates for regulation of the global agriculture. As long as countries refuse to regulate the physical stocks of commodities, price volatility will continue. This agreement is a first step but the road is still long before the starts up a real regulation and governance of world agriculture, "he says.