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France could face Moody's downgrade

French Finance Minister Francois Baroin gives a press conference at the G20 meeting of Finance Ministers and Central Bank Governors in Paris.

Steve Chiotakis: One of the biggest economies in Europe -- France -- has been given a warning by Moody's. The country's top AAA credit rating is being reviewed and may be given a negative outlook all because France's financial strength that has "been weakened".

The BBC's Hugh Schofield is with us now from Paris with the latest on that story. Hi Hugh.

Hugh Schofield: Hello.

Chiotakis: What has been the official reaction in France?

Schofield: Well, they're worried, and they've admitted this is something they've got to keep their eyes on. And Francois Baroin, who's the finance minister, has effectively said that the government will take steps to make sure that it does preserve its AAA rating. And that, we're interpreting, will mean that they may well have to have more austerity -- a new addition to the budget in the weeks or months ahead -- if this threat begins to become more real.

Chiotakis: What is so important, Hugh, about what Moody's had to say about France today?

Schofield: Well, it wasn't a downgrade of the credit rating, but it was a warning. And you know, as such, it's already set the alarm bells ringing. It said that there was a stable outlook at the moment but this stable outlook might change, and that therefore the agency is going to keep France under review for the next three months.

So it really is a kind of warning to France to make sure that in the next three months, nothing happens to make the agency change its credit rating and mark it down. And so, you know it is something which the government takes very seriously, because if the credit rating changes, so of course does the cost of its debt.

Chiotakis: The BBC's Hugh Schofield in Paris. Hugh, thank you so much.

Schofield: Thank you very much to you.

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