NEW YORK (AP) — Moody's Investors Service on Monday downgraded France, stripping it of its prized AAA credit rating due to concerns over its prospects for economic growth and its exposure to Europe's financial crisis.
Moody's lowered France's rating one notch to Aa1. It kept the rating's outlook at negative, meaning it could face future downgrades.
The ratings agency said that it is becoming increasingly difficult to predict how resilient France will be to future euro-area shocks.
But the agency noted that the country's rating remains high compared with many other European countries. It cited for this France's diversified economy and "a strong commitment to structural reforms and fiscal consolidation."
The downgrade will heighten fears that Europe's debt crisis is spreading from the so-called peripheral nations like Greece, Portugal and Ireland to the core of the euro region. Standard & Poor's, a rival rating agency, lowered its rating on France's debt one notch from AAA to AA+ in January, citing the deepening political, financial and monetary problems within the eurozone.