Moody's downgrades France govt bond rating

NEW YORK - Moody's Investors Service on Monday cut France's government bond rating by one notch from Aaa to Aa1, and maintained the negative outlook, citing reflected some key factors.

First, it said France's long-term economic growth outlook was negative affected by multiple structural challenges, including its gradual, sustained loss of competitiveness and the long-standing rigidities of its labor, goods and service markets.

Second, France's fiscal outlook was uncertain as a result of its deteriorating economic prospects, both in the short term due to subdued domestic and external demand, and in the longer term due to the structural rigidities.

The action followed Moody's decision on July 23 to change to negative the outlooks on the Aaa ratings of Germany, Luxembourg and the Netherlands.