Losing 'triple-A' not cataclysm: French minister

14th December 2011, Comments 0 comments

For France to lose its triple-A debt rating would be bad news but "not a cataclysm", Foreign Minister Alain Juppe was quoted as saying Wednesday, amid rumours a downgrade was imminent.

Since the weekend, French officials have been preparing the ground for a ratings agency to decide that the nation's public finances no longer merit a perfect debt rating, a result once seen as a disaster.

"It wouldn't be good news, but it wouldn't be a cataclysm either," Juppe told the financial daily Les Echos, in an interview conducted on Tuesday.

"The United States lost their triple-A and still manage to borrow on the markets in good conditions," he noted.

Ratings agencies Standard & Poors and Moody's have warned they are looking again at all eurozone member states -- even triple-A powers like France and Germany -- amid fears the bloc's sovereign debts are unsustainable.

Eurozone members have tried to reassure markets by adopting austerity measures and promising to sign a new "fiscal compact" by March that would bind them to tighter budgetary discipline.

But many commentators believe the measures are insufficient to counter the sheer weight of debt being held by countries such as Greece and Italy -- and in turn by private banks in France and elsehere.

All member states have been warned but France is thought particularly vulnerable, despite President Nicolas Sarkozy's vow to defend its rating.

© 2011 AFP

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