France’s President Nicolas Sarkozy is struggling to save his reputation after France just lost its triple-A credit rating, only three months before his reelection, the AFP reported.
In hopes of saving face, Sarkozy sent his prime minister to make a statement, basically telling the French that the Standard & Poor’s credit rating is just one indicator of economic health.
"This decision constitutes an alert which should not be dramatized any more than it should be underestimated," Francois Fillon told reporters in a televised conference, the AFP reported.
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On Friday the S&P cut France’s top triple-A credit rating, held by the country since June 1975. France is now one notch lower with an AA+ rating. Other euro zone countries were stripped of their triple-A rating and sent two notches below their original rating, Reuters reported.
S&P defended it's decision to downgrade nine European countries, saying the eurozone is not doing enough to solve the debt crisis.
Last year, Sarkozy ran through two sets of austerity measures in an attempt to save the triple-A rating and lower borrowing costs. But since the downgrade became inevitable in 2011, Sarkozy begun focusing on growth, such as overhauling welfare financing, company labor charges and job flexibility, Reuters reported.
He currently has one of the lowest popularity ratings of any French president.
The front runner in this year’s presidential election, Francois Hollande, immediately spoke out after France lost its triple-A rating. He is a candidate for the socialist party.
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"Nicolas Sarkozy made keeping the triple-A a political objective and even called it an obligation for his government," Hollande said, Reuters reported. "This battle has been lost. And this brings into question the credibility of the strategy implemented since 2007," he said, adding that it was Sarkozy's policies, not France, that had been downgraded.
Austria lost its credit rating along with France on Friday and has left Germany as the only euro area with a stable triple-A rating, Bloomberg reported. Analysts have said the downgrade of France has only widened the gap between Europe’s north and south countries, leaving Paris financially and politically weaker as Berlin remains strong through euro zone crisis negotiations, the AFP reported.