France dodged a downgrade at Moody’s Ratings, respite for a country beset by surging bond yields, political gridlock and street protests.

The company kept the euro zone’s second-biggest economy at Aa3, seven levels above junk and on a par with the UK. The outlook is negative.

“Slower growth and a higher deficit have pushed France’s debt burden somewhat higher than previously expected,” Moody’s said. “Bond yields have risen more rapidly than we expected, while widespread social protests have erupted which could constrain fiscal consolidation efforts.”The reprieve arrived on the eve of another tense weekend in France, where authorities are trying to avoid a repeat of large-scale riots that caused substantial damage in several cities.

France remains unable to find a way to contain its swelling debt burden, which put the nation at the forefront of bond-market anxiety over the past weeks. French yields have risen more than any other in the developed world this month, hitting the highest level in 24 years.

The country’s ever-increasing debt mountain is fueled by a deficit set to blow out to 5.4% of economic output this year. Political gridlock, slumping growth and rising interest costs have derailed attempts at consolidation.

Prime Minister Sébastien Lecornu has proposed a finance bill to sharply constrain spending and raise tax revenues to meet a deficit goal of 5% next year, but the blueprint’s future is uncertain as he has no majority in parliament.

France’s National Assembly on Friday rejected the “receipts” portion of the 2027 social security budget bill, which sends the original version of the draft law to the Senate. Members of the lower house will turn back to debate over the main budget bill next week.

“The 2027 budget process coincides with some of the most extensive social protests France has experienced in many years,” Moody’s said in a statement on Friday. “Despite the challenging political and social environment, our baseline assumption is that a deficit-reducing budget for 2027 will eventually be adopted, possibly by decree.”

Last weekend, political discord spilled onto the streets of French cities. Rioters attacked public buildings and looted stores as more than half a million people marched in protest against the high cost of living.

The heightened uncertainty has caused a closely watched gauge of bond risk to rise to levels last seen during the euro-area debt crisis. The spread between 10-year yields in France and Germany, the region’s safe asset, reached 178 basis points on Thursday, compared with just 85 basis points at the start of September before the selloff picked up.

Moody’s decision to keep France at its current level for now means that its score remains one notch higher than those of S&P Global Ratings and Fitch Ratings, which both cut their assessments during a budget clash in the fall of 2025.

“This decision recognizes the solidity of our economy and the credibility of the budget presented by the government,” French Finance Minister Roland Lescure said Friday in a statement.

The country stumbled in reviews last month, with Scope Ratings issuing a downgrade and Morningstar DBRS switching its outlook to negative. S&P has a scheduled update for Nov. 27.