France replaces Italy as the "typical representative" of Europe's financial woes.

The long-term political crisis in France has made it replace Italy as the focus of fiscal risk in the Eurozone, a role that Italy has long been synonymous with. Last Friday, this shift in roles became more pronounced: France experienced its second sovereign credit rating downgrade within a week, while Italy received its first credit rating upgrade from Fitch since 2021. Fitch's assessment shows that the rating gap between the two countries is narrowing, with only three grades difference currently. The current short-term concerns facing France are clear: continued political turmoil since last year's interim elections, failure to meet fiscal deficit targets multiple times, and a lack of a clear fiscal repair plan. The French parliament has split into several irreconcilable factions, and in less than two years, France has already replaced five prime ministers. Meanwhile, the current government in Italy, led by Prime Minister Giorgia Meloni, has been in power for nearly three years, a rare longevity in Italy, and the government has successfully accelerated the pace of deficit reduction. However, despite the short-term changes in the situation in both countries, long-term factors are still at play. In fact, France's current fiscal woes have been brewing for decades.