Despite its debt, the city of Paris returns to its pre-crisis rating

It was April 14, 2020 halfway between the start and the end of the first confinement: Standard & Poor's modified the rating of the city of Paris. The capital changed from “AA” with a stable outlook to “AA-” (with a negative outlook). Reversal of the situation on October 8: the American rating agency maintains the “AA” rating and now qualifies the outlook no longer as “negative” but as “stable”.

“This is the best possible score for a local authority”, declares to La Tribune, the deputy mayor (PS) in charge of finances, the budget, green finance and funeral affairs. "We can't be above," insists Paul Simondon. This rating is nonetheless surprising in a context where the City's debt fluctuates between 6.6 billion euros, according to the majority on the left, and 7.71 billion euros, according to the opposition of right.

“Our sound management is recognized as such”

"The debt has stabilized," retorts Anne Hidalgo's deputy. "5.7 billion euros at the end of 2017, 5.92 billion euros at the end of 2018 and 5.88 billion euros at the end of 2019", he says. At that date, Paris also had a cumulative operating surplus of around 200 million euros, which enabled it to finance, from May 2020, an economic support plan of... 200 million euros. In other words, its surplus results from the operating expenditure section were allocated to the capital expenditure section.

A revival of the real estate market

Since the start of Covid-19, Paris has indeed lost 800 million euros in 2020 and nearly 1.2 billion euros to date, between the explosion in health and social expenditure and the fall in revenue linked to events and tourism. From now on, "we are observing fundamentals which remain good as well as a recovery in the economy, including the real estate market", underlines the deputy mayor (PS) in charge of finance, the budget, green finance and funeral affairs. .

@Gamersbodd @alexhellie @nytimes Hiding your body from germs won't allow you to build natural antibodies & over the… https://t.co/DxliKAs4N0

— Dave Reinhardt Tue May 18 13:02:42 +0000 2021

In this area, after having lost, between April 2020 and March 2021, 224 million transfer duties for consideration (DMTO also known as "notary fees"), which any buyer pays when buying an apartment or house, "since this summer we have been witnessing a restart at a rate equivalent to that of 2019", underlines Paul Simondon. The return of tourists to the capital is similarly welcomed “happily”. “Paris is too beautiful not to be visited,” he continues.

Maintaining the investment and defining a carbon budget

The good rating is also explained by the maintenance of investment, despite the drop in self-financing, with a plan of 1.4 billion euros voted as part of its 2021 budget. On the menu: housing construction, thermal renovation, infrastructures, active mobility (walking, cycling, scooters, etc.), public transport and vegetation. “We have also put in place precise management to go to priorities”, notes the deputy mayor (PS) in charge of finance, budget, green finance and funeral affairs.

At the same time, Paul Simondon continues to work on the definition of a carbon budget with the association of elected officials Urban France and the association I4CE-Institut de l'Économie pour le Climat to assess the climate impact of the city's budget. "We want to consolidate the impact of each line and its 'very favourable', 'favourable', 'neutral' or 'unfavourable' effect, he explains.

The system has already been tested on the 2019 accounts, implemented in 2020 on expenses related to school affairs, early childhood, culture or roads, before being generalized on the 2021 budget documents. "For each sector, this makes it possible to obtain an analysis and to set objectives so that the budget is the most effective tool for a successful transition", concludes Anne Hidalgo's deputy.

Read also Paris has a deputy to be at the forefront of green finance

4 mins

Share :