France’s(NOT ONLY FRANCE !) public debt soared to a record 75.8 percent of output in the third quarter, official figures showed Wednesday, a week after Paris got a warning on its credit standing.

The new debt figure from the statistics institute INSEE followed a stern message from Fitch Ratings that the government had to take tougher measures to rein in state spending if it wanted to preserve its top grade credit rating.

France is hardly alone among European Union countries that have run up big debts, after having spent heavily to combat a crippling recession in 2008 and 2009, and now face pressure on their sovereign ratings.

Greece has suffered sovereign downgrades this month from Fitch and two other agencies, Moody’s and Standard & Poor’s.

Fitch in November downgraded Ireland while Standard & Poor’s took similar action against Spain in January.

Fitch last week said all major governments with top ratings had to tame debt, targeting specifically Britain, Spain and France.

“UK, Spain and France in particular must articulate more credible fiscal consolidation programmes over the coming year given the pace of fiscal deterioration and the budgetary challenges they face,” the agency said.

“Failure to do so will greatly intensify pressure on their sovereign ratings,” it added.

France’s third quarter debt-to-GDP ratio was up by 1.9 points from the second quarter to 75.8 percent, well in excess of the 60 percent stipulated in the Maastricht Treaty that established the financial basis of the eurozone.

The French government has predicted that the ratio will reach 77.9 percent by the end of 2009 and 84 percent in 2010.

The debt in the July to September period rose 29.4 billion euros from the second quarter to a record 1.457 trillion euros (2.1 trillion dollars).

INSEE said the debt surge in the third quarter was mainly used to finance the state budget deficit.

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- doubledutch

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