Debt Crisis: Agency Moody’s maintains France’s AAA rating after earlier downgrade by S&P
RATINGS agency Moody's is maintaining France's top-tier AAA credit rating for now after the country was downgraded by rival Standard & Poor's.
Moody's kept France's outlook at stable. S&P rated France's outlook as negative.
Moody's cited the economy's overall strength but said growth prospects presented "risks to the French government's fiscal consolidation plans".
It said it "will update the market during the first quarter of 2012 as part of the initiative to revisit the overall architecture of our sovereign ratings in the EU".
Stock markets were mixed today following Standard & Poor’s cut to France’s AAA rating.
On Friday, S&P also downgraded the debt ratings of a slew of European countries and today Moody’s said that its AAA rating for the eurozone’s second biggest economy, France, will come under pressure if its debt/Gross Domestic Product ratio continues to rise and the debt crisis worsens.
The euro managed to pare back some losses while Germany’s DAX gained 0.2pc, France’s CAC fell 0.3pc while the FTSE 100 fell 0.2pc.
And the International Monetary Fund warned that if the eurozone situation continues to deteriorate it could have far-reaching consequences for the world economy.
IMF deputy managing director David Lipton said: “Without bold and concerted international action.”
Europe could be swept into a downward spiral of collapsing confidence, stagnant growth, and fewer jobs.
“And in today's interconnected global economy, no country and no region would be immune from that catastrophe. This is especially true for Asia.
Meanwhile, the new Greek Prime Minister Lucas Papademos said he was confident a deal would be done with the country’s creditor banks.
Greece is seeking a 50pc reduction on its debt pile but last week talks broke down pushing Athens closer to default and further away from the latest €130bn tranche of bailout loans it desperately needs.
Meanwhile, French President Nicolas Sarkozy is meeting Spanish King Juan Carlos and the country’s Prime Minister Mariano Rajoy for crisis talks today.
Spain was also downgraded by S&P on Friday.