Sarkozy suffers downgrade as Spanish PM vows austerity

 
Tim Wallace
Follow Tim
FRENCH Minister Francois Fillon declared he would do “everything” to get France’s triple-A rating back after Standard And Poor’s cut it to AA+ on Friday, leading to president Sarkozy losing ground in polls.

“It is always better to have the best rating,” Fillon told Le Journal du Dimanche, a Sunday newspaper.

His claims could clash with Sarkozy’s promises that no more austerity would be announced this year.

The president did not address the downgrade directly over the weekend, but did say “The crisis can be overcome provided we have the collective will and the strength to reform our country,” during a speech.

Meanwhile Spanish PM Rajoy, with whom Sarkozy will meet today, promised to press ahead with spending cuts and economic reforms yesterday, after the government’s credit rating was cut on Friday. Spain was downgraded two notches by ratings agency Standard and Poor’s, taking it from AA- to A.

Rajoy, who became prime minister in December after promising tough fiscal austerity, told a party meeting that he plans to support new spending controls over the Eurozone as a whole at this month’s EU summit.

“I am going to take a clear, firm and convincing stand for the euro,” he said. “I am going to say that all the countries of the European Union must make economic reforms.”

He was echoing the words of German chancellor Angela Merkel, who earlier said “We are now challenged to implement the fiscal pact quickly.”

ANOTHER AAA BITES THE DUST
German chancellor Angela Merkel’s country still has its AAA rating, while French president Nicolas Sarkozy has avoided commenting on France’s downgrade to AA+

UK
AAA

FRANCE
AA+

SPAIN
A

GERMANY
AAA

AUSTRIA
AAA

HUNGARY
BB+

GREECE
CC

ITALY
BBB+

STANDARD AND POOR’S CREDIT RATING
Prime (AAA)

High grade (AA+, AA, AA-)

Upper medium grade (A+, A, A-)

Lower medium grade (BBB+, BBB, BBB-)

Non-investment grade (BB+, BB, BB-)

Highly speculative (B+ or below)