France’s credit rating downgraded to AA from AA+

Rating agency Standard and Poor’s cut France’s sovereign credit rating down by one notch today to AA, from AA+.

All of the three major rating agencies had already downgraded France from the top-flight triple-A status, but Standard and Poor’s is the first one to do so for a second time round.

Efforts by Francois Hollande’s socialist government to get the economy moving again have not been sufficient to improve the long term outlook, the rating agency said.

In a statement, Standard and Poor’s said: “We believe the French government’s reforms to taxation, as well as to product, services, and labour markets, will not substantially raise France’s medium-term growth prospects.”

“Ongoing high unemployment is weakening support for further significant fiscal and structural policy measures,” it added.

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