France to strive to keep triple-A rating: minister

18th October 2011, Comments 0 comments

France will do everything in its power to maintain its triple-A rating after Moody's warned it may place the country on negative outlook, Finance Minister Francois Baroin said Tuesday.

"We will be there to preserve our triple-A rating... We will do everthing in our power not to be downgraded," Baroin told France 2 television after Moody's issued the warning, saying France's financial strength had weakened.

Baroin said that France had room to manoeuvre to protect its top credit rating which allows it to borrow at favourable rates.

"We have room to manoeuvre... We will take all the measures so there is no concern," he added.

"Everything has been put in place over the past three years to avert a downgrade."

Moody's fired a warning shot at France on Monday saying it would determine over the coming three months whether Europe's second largest economy merited its stable status given its weakening economy.

If Moody's changes the French credit rating from stable to negative following that assessment then that would signal a likely downgrade in future, something the French government is anxious to avoid as it would lift the cost of borrowing.

If that is the case then France would follow in the unwilling footsteps of the United States.

In August, Standard & Poor's dealt the US its first-ever ratings downgrade.

France is rated triple-A by all three leading credit rating agencies, Moody's, Standard & Poor's and Fitch Ratings.

Moody's said France's "financial strength has weakened, as it has for other euro area sovereigns, because the global financial and economic crisis has led to a deterioration in French government debt metrics -- which are now among the weakest of France's Aaa peers."

© 2011 AFP

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