Moody's drops France's credit rating

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PARIS, Nov. 19 (UPI) -- Credit rating firm Moody's Investors Service lowered France's AAA rating a notch Monday, citing the country's high exposure to investments in Spain and Greece.

Moody's said the outlook for France to steer clear of trouble was diminishing, given the high level of investments in troubled eurozone countries, The Daily Telegraph reported Monday.

Moody's, which dropped France from the top rating of AAA to Aa1, also cited France's poor track record in making changes.

Moody's, which gave France's rating a negative outlook nine months ago, is now the second major credit rating agency, along with Standard & Poor's, to downgrade its credit rating.

Fitch Ratings, which is a French company, has so far left France at AAA.

Moody's said France was being hurt by rigid labor laws and outmoded corporate regulations.

While President Francois Hollande's administration was attempting to make positive changes, "The track record of successive French governments in effecting such measures over the past two decades has been poor," Moody's said.

"Moody's is now giving France the same rating as Standard & Poor's, which has allowed us to live with low interest rates for many months," said French Finance Minister Pierre Moscovici, referring to borrowing costs for the French government, which have not been adversely affected by the change in its credit status.

However, "further shocks to sovereign and bank credit markets would further undermine financial and economic stability in France as well as in other euro area countries," Moody's said in a statement.