Ratings agency Moody's maintained France's sovereign rating on Friday, while lowering its outlook from "stable" to "negative," issuing a warning to the country amid the budget debate in parliament.

Moody's maintained the rating at Aa3 (good quality debt), while its competitors Fitch, on September 12, and then S&P Global, last week, lowered theirs by one notch, to A+ (upper-medium quality debt).

With this downgrade, Moody's explains that it wants to reflect "the growing risks of a weakening of institutions and governance in France, as well as a partial decline in structural reforms."

She highlights the risk of "lasting fragmentation of the country's political landscape," which risks "harming the functioning of institutions," with governments "continuing to struggle to obtain a parliamentary majority."

A failure to obtain laws that "effectively address the challenges would weaken the country's institutions," she continues.

"In the absence of budgets that (effectively) contain spending or increase revenue, the deficit would remain larger and more persistent than we currently project," the agency continued.

French Minister of Economy and Finance Roland Lescure immediately "took note" of the decision, which he said "demonstrates the absolute necessity of building a collective path towards a budgetary compromise."

The government, the statement sent to AFP continued, "remains determined to meet the deficit target of 5.4% of GDP announced for 2025 and to pursue an ambitious path to reduce the public deficit, to return to below 3% of GDP in 2029, while preserving growth."