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France plays down AAA loss

Monday, January 16, 2012 - 01:54

Jan.16 - French President Nicolas Sarkozy was on a visit to Spain as his country mulled over S&P's downgrade. His finance minister said France needed diversity and a strong banking system to weather the storm. Joanne Nicholson reports

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An honour from Spanish royalty for the French President for tackling terrorism. But the award for Nicolas Sarkozy on a visit to Madrid was little compensation for Friday's downgrade by ratings agency Standard and Poor's. Finance Minister Francois Baroin said it was important not to ignore any elements in order to overcome the debt crisis. (SOUNDBITE) (French) FINANCE MINISTER FRANCOIS BAROIN, SAYING: "France is a big country and for the economy to survive there has to be some basic fundamentals, there needs to be diversity, a strong banking system and a high rate of savings so that we can have confidence in the different elements at play for an economy to survive." The EU has also questioned the need for the downgrade at such a time. (SOUNDBITE)(English) EU COMMISSION SPOKESMAN, OLIVIER BAILLY, SAYING: "The timing is odd just because it came at the end of, after several positive developments not only by the countries and efforts made, structural reforms announced in key member states over the past three months like France, Italy and Spain." News that ratings agency, Moody's, would uphold France's triple A status, saw the French markets recovering losses from the initial shock from Standard and Poor's. But, Moody's warned the triple A rating may come under pressure if the public debt keeps rising or the debt crisis in Europe, as a whole, gets worse. In Rome, the Italian Prime Minister Mario Monti was discussing Europe's new permanent bailout fund with the European Council President Herman Van Rompuy. President Sarkozy was due to meet with Prime Minister Monti, and the German chancellor, Angela Merkel on Friday. This has now been postponed and is likely to be held at the end of February. Joanne Nicholson, Reuters

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France plays down AAA loss

Monday, January 16, 2012 - 01:54