Moody's warns on French borrowing costs

AP News
Posted: Nov 21, 2011 7:43 AM
Moody's warns on French borrowing costs

Ratings agency Moody's has warned that France's creditworthiness remains under pressure after market jitters last week saw its borrowing costs rise to record levels.

In a weekly note, Moody's Investors Service analyst Alexander Kockerbeck says that if the high borrowing costs persist for an extended period it would have "negative credit implications" for the triple-A rated country's credit outlook.

The agency says France faces "significant downside risks," with a chance that higher taxes and lower spending will undermine the economic growth France needs to balance its budget by 2016, as pledged.

Moody's has a stable outlook on France's credit rating, but last month it said it might put France on notice for a possible downgrade because of weakening growth and the high cost of bailing out struggling neighbors and banks.