Ratings agency Moody's Investors Service
downgraded the French government's bond rating late Monday by one
notch, from Aaa to Aa1, while leaving the outlook negative.
In a statement, Moody's said that the "first driver" of the French downgrade was the risk to economic growth and government finances from the country's structural economic problems.
"These include the rigidities in labour and services markets and low levels of innovation, which continue to drive France's gradual but sustained loss of competitiveness and the gradual erosion of its export-oriented industrial base," the ratings agency said.
Moody's placed a negative outlook on French debt on February 13. On July 23, the agency announced an assessment of the sovereign rating "to determine the impact of the elevated risk of a Greek exit from the euro area, the growing likelihood of collective support for other euro area sovereigns and stalled economic growth."
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