REPORTING FROM PARIS -- French officials tried to calm financial markets Friday evening, declaring that the reported downgrading of France's AAA credit rating is "not good news ... but not a catastrophe."
Although government ministers have been preparing the ground for an eventual loss of the coveted rating for weeks, the timing of Standard & Poor's apparent decision took everyone by surprise. A week ago, another ratings agency, Fitch, announced it did not foresee downgrading France in 2012.
But just before 4 p.m. Paris time, government sources were reporting that France had lost its AAA rating.
"It's not good news, but it's not a catastrophe," Finance Minister Francois Baroin said on French television.
"It's not the ratings agencies who dictate French politics," he said, adding that there would be no new austerity measures.
He said the "general balance" of France's finances was being sanctioned. "We're going in the right direction," Baroin said. "All that can be done is being done."
Baroin, along with Prime Minister Francois Fillon and Budget Minister Valerie Pecresse, was summoned to a crisis meeting with President Nicolas Sarkozy at the Elysee Palace on Friday evening after the news broke.
The downgrade is bad news for Sarkozy less than four months before he is expected to see reelection for a second term.
-- Kim Willsher
Photo: A cardboard cutout of an "AAA," a reference to France's then-credit rating, is posted at La Defense business district outside Paris last November. Credit: Ian Langsdon/EPA