France loses top credit rating

France loses top credit rating, the government says!!

France gets rid of the top credit rating from S & P, complicating efforts to resolve the debt crisis!!

France was deprived of its first class Friday, credit rating and rumors in financial markets, that its debt-ridden neighbors would be next, complicating European efforts to solve its financial crisis.Finance Minister Francois Baroin told French television that France was downgraded by one notch on the credit rating agency Standard & Poor 's. This will mean rating of AA +, as well as the United States since he was demoted last summer.Rumors of teaching through the markets, Austria and Italy may be reduced as follows, possibly as early as the end of the exchange trading day in New York. S & P warned the 15 European countries in December that they were at risk for decline.Baroin said that France has amended its rating ", as most of the euro area," referring to 17 European countries using the euro currency, but there was no confirmation from S & P, which in any other country was cut on Friday.France is the second largest contributor to Germany financial rescue fund in Europe. 

 The Fund still has a rating of AAA, which means that it can take on the bond market at low rates.Reduction of the French credit rating could increase the bond traders' cost of borrowing to fund, said Guy Lebas, chief fixed income strategist at Jenny Montgomery Scott, a financial firm."There's legitimate reason for concern," he said. "Weaker French way to save the weak foundation."Shares fell on Friday to lower trade rumors venues in Europe and the USA. But the decline was nothing like the painful fluctuations of the past summer and fall, when the debt crisis threw the markets bustle.Index Dow Jones Industrial Average in New York fell by 0,5 precent. Shares fell 0.6 percent in Germany, 0.5 per cent in the UK and 0.1 in France, but each of these markets are closed until Baroin made the announcement on French television.Borrowing costs for the French government rose to the announcement. Yield on 10-year government bonds rose in France to 3.1 percent from 3 percent previously. That is still less than the 3.36 percent rate on the same connection last week and well below the 6.6 percent that Italy must pay to borrow money from investors in bonds for 10 years.Germany, the strongest economy in Europe, makes a profit of 1.76 percent. United States 10-year Treasury note is paid 1.85 percent on Friday, down 0.08 percentage points - a sign that investors are seeking safety in U.S. debt.The French government, declared that there were points lower on their own terms, rather than the S & P,. France-2 television announced 10 minutes before its evening news program that will Baroin.Minister of Finance said that the decline was "bad news" but not "disaster.""You have to be a relative, you must remain calm," he said on France-2 television. "We must not frighten the French about it."Earlier Friday, the euro reached its lowest level in more than a year and the cost of borrowing for the European countries have grown. Stock markets in Europe and the U.S. have fallen.Fears of lower end of softly acidic brought encouraging week for heavily indebted countries in Europe and was a stark reminder that the debt crisis the 17-country euro zone is far from complete.Earlier Friday, Italy is limited to a strong week of auctions of government debt, saw its borrowing costs, falling the second consecutive day, as it successfully raised as much as euro4.75 billion ($ 6.05 billion).Spain and Italy completed a successful auction of bonds on Thursday, and European Central Bank President Mario Draghi said that "tentative signs of stabilization" in the regional economy.Reduce ratings could increase the value of European government debt as investors demand more compensation for holding bonds are considered riskier than they were. The higher cost of borrowing will give greater financial pressure on the country, already struggling with heavy debt burdens.In Greece, for talks on Friday to get investors to take a voluntary reduction of their Greek holdings link appeared on the brink of collapse, which increases the risk of potentially catastrophic default of the country, which launched Europe's financial problems for more than two years ago.The deal, known as the private sector, aimed at reducing the debt of Greece to euro100 billion through the exchange of bonds for new private lenders, with a lower value, and is a key part of euro130 billion in international financing. Without him, the country could suffer catastrophic default, which will send shock waves through the global economy.Prime Minister Lucas Papademos and Evangelos Venizelos Minister of Finance met on Thursday and Friday with representatives of the Institute of International Finance, a global body representing the private bondholders. Ministry of Finance officials from the eurozone also met in Brussels on Thursday night.On the Italian auction on Friday, investors demanded interest rate 4.83 per cent to Italy three years the money, compared to an average rate of 5.62 percent in the previous auction, and much lower than the 7.89 percent in November, when the financial crisis in the country was the most acutely.Although Italy has paid a slightly higher rate on the bonds maturing in 2018, which were also sold at auction on Friday, the demand was between 1.2 percent and 2.2 percent higher than what was on offer.The results were not as strong as the bond auction the previous day, when Italy raised euro12 billion, and demand was strong for the sale of Spanish debt."In general, he points out that while all auctions in the euro zone were battles wins the war is far from being solved (in any case)," said Marc Ostwald, a strategist at Monument Securities. "These auctions eurozone will continue to present themselves as the market risk of events for a very long period."Euro1.9 trillion Italian public debt and heavy borrowing needs this year became the center of European debt crisis.In Italy, passed austerity measures and structural reforms is well known that the Prime Minister Mario Monti, the requirements should lead to lower Italy's high yield bonds, which he says is no longer justified.Analysts said a successful auction last relationship, at least in part of the ECB, which is flooded with cheap loans from banks, giving them cash that at least some seem to be using to buy higher-yielding short-term government bonds.Some banks have 523 billion to euro489 credit for up to three years if the present value of interest at a rate of 1 percent.