France goes soft-core

FRIDAY, January 13th, proved unlucky for nine euro-zone countries: they had their credit ratings cut by Standard and Poor’s (S&P) soon after the American markets closed for the week. France and Austria were stripped of their triple-A credit rating. Three smaller euro-zone countries (Malta, Slovenia and Slovakia) also suffered a one-notch downgrade. Italy and Spain had their ratings knocked down by two notches (to BBB+ and A respectively), as did Portugal and Cyprus, whose debts are now considered junk by S&P.

Though grim, the news was not the blanket downgrade feared by eurocrats. In December S&P had given a warning of a possible downgrade to all euro-zone countries, bar Greece (which could fall no further) and Cyprus (which was already on the hit-list)—just days before leaders of the European Union met in Brussels to tackle the euro-zone crisis once and for all. S&P argues that their fire-fighting efforts have fallen short of what is needed, hence the downgrades. The December summit had "not produced a breakthrough of sufficient size and scope to fully address the euro zone’s financial problems,” the ratings agency said in a statement.

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