France's loss of the top credit rating at Moody's Investors Service may weaken President Francois Hollande's leverage in European budget talks and deepen concern in Germany over its neighbor's lagging competitiveness.
The downgrade late yesterday of Europe's second-biggest economy underscores the concern expressed by allies of German Chancellor Angela Merkel that the Socialist Hollande's failure to recognize the urgency of France's woes risks a deepening of Europe's slump.
"This downgrade will certainly increase pressure on France big-time," Jan Techau, director of the Carnegie Endowment for International Peace office in Brussels, said today in a phone interview. "It gives Germany more of an edge over France."
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