Finding the right path: a rough task for the French economy right now (photo, E Wallace, Val d'Isere December 2011)

GENEVA, SWITZERLAND – Friday’s credit downgrade by S&Ps sent France into a bad case of the glums, but on Monday 16 January things looked brighter, as Moody’s another key credit rating agency, maintained the country’s AAA note. Moody’s says its assessment Monday does not constitute “a rating action” and it will consider France’s situation again later in the quarter.

The move Friday was not unexpected, but it reheated debates over economic stability in the eurozone. Stock markets in Asia fell slightly Monday in fallout from the news, it appears, but European trading was flat.

The Wall St Journal’s assessment Monday was that “The downgrade to France, the zone’s second-largest economy, will make it harder—and potentially more expensive—for the euro zone’s bailout fund to help troubled states, because the fund’s own triple-A rating depends on those of its constituents. The downgrades also speak to how deeply the concerns over countries on the euro zone’s periphery have penetrated its core.”

Moody‘s France site, in French, was glum last Friday in its outlook for French business. Le Monde, meanwhile, turned Monday to Denmark to examine its 1986 “potato cure” that saved its credit rating after two downgrades a decade ago. The named was given because the extreme austerity programme came at the same time as the one-week harvest vacation, but as the French newspaper points out, it also gives an idea of the programme.

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