Solution to euro crisis now more urgent than ever
The news that ratings agency Standard & Poor's is set to strip France of its Triple-A credit rating won't cause many tears to be shed in this country. However, we would be well-advised to keep any feelings of schadenfreude firmly under control. The latest series of downgrades, which also sees Austria lose its Triple-A rating, is a further sign that the euro financial crisis remains unresolved and is continuing to worsen.
In truth, having been flagged in advance for so long, the decision by S&P to downgrade France, while it will no doubt wound President Nicolas Sarkozy's amour-propre, and possibly his re-election chances, will have little practical short-term impact. As in the case of last year's American credit-rating cut, the impact of such a move had long since been priced into bond yields by the markets.
Far more worrying in the medium term is the continuing failure of Europe's leaders to solve the euro debt crisis, something which matters greatly to us in this country.