More Euro woe in France rating fall
FRANCE has been stripped of its top-notch credit rating, again throwing Europe's ability to fight off its debt crisis into doubt.
Speaking on TV finance minister Francois Baroin confirmed the rating had been lowered by one notch. That would mean a rating of AA+, the same rating the United States has had since Standard and Poor's (S&P) downgraded it last August.
Mr Baroin said France had received a change to its rating "like most of the eurozone" referring to the 17 European nations that use the euro currency, but there was no confirmation from S&P that any other nation had been downgraded.
S&P had warned 15 European nations in December that they were at risk for a downgrade.
A credit downgrade would escalate the threats to Europe's fragile financial system and raise the costs at which the affected countries -- some of which are already struggling with heavy debt loads and low growth -- borrow money.
However, borrowing costs for the financial markets did not appear to be thrown into turmoil by the announcement.
Earlier yesterday, the euro hit its lowest level in more than a year and borrowing costs for European nations rose. Stock markets in Europe and the US fell.
Fears of a downgrade brought a sour end to a mildly encouraging week for Europe and were a stark reminder that the 17-country eurozone's debt crisis is far from over.
Earlier today, Italy had capped a strong week for government debt auctions, seeing its borrowing costs drop for a second day in a row as it successfully raised as much as ¤4.75bn.
However in Greece, negotiations yesterday to get investors to take a voluntary cut on their Greek bond holdings appeared close to collapse, raising the spectre of a potentially disastrous default.