France - Eurozone -

Article published the Sunday 15 January 2012 - Latest update : Sunday 15 January 2012

What will France losing its triple A mean?

AFP/Philippe Huguen

By Tony Cross

French politicians are squabbling over how important Friday's downgrading by the Standard & Poor's rating agency is and who is responible. But what will it mean for ordinary French people and European institutions? And will it kill President Nicolas Sarkozy?

France will pay more interest on state borrowing, scheduled to be 180 billion euros this year, further boosting state debt;

Dossier: Eurozone in crisis
Local authorities’ debts will get bigger – many owe large amounts to banks whose interest rates will go up – pushing up local taxes;
State institutions, such as social security, will pay higher interest rates, as will companies that are all are part-owned by the state;
Mortgages and other personal loans in France and other downgraded countries may become more expensive;
Foreign investors, such as pension funds, may put their money elsewhere;
Europe will have more austerity – finance ministers say they will agree a new treaty to tighten fiscal rules at the end of the month;
Some European banks may be downgraded because their governments are seen as too risky to back them up if necessary;
The European Financial Stability Fund - the eurozone bailout fund - could be downgraded since its rating depends on that of the six top-rated countries;
Nicolas Sarkozy will die (electorally) - "If France loses its AAA, I'm dead," he told aides in October, according to Le Canard Enchaîné weekly.