The Straits Times
Published on Nov 20, 2012

Downgraded France says it needs more time


PARIS (AP) - France's government has shrugged off the latest downgrade of its credit rating, saying on Tuesday that it just needs time for reforms to the sluggish economy to take root.

In a setback for President Francois Hollande's Socialist government, Moody's Investors Service stripped Europe's No. 2 economy of it of its prized AAA credit rating late Monday on concerns that its rigid labour market and exposure to Europe's financial crisis were threatening its prospects for economic growth.

This is the second ratings downgrade to have hit France this year: Standard & Poor's agency lowered its score in January. The third leading agency, Fitch, still ranks France at AAA-rating but has had it on review for a downgrade since late last year.

But Finance Minister Pierre Moscovici insisted that France's credibility remains strong and that the government's plan to reduce unemployment and restore growth would bear fruit.