The international ratings agency Moody's cut France's top bond credit rating by one notch to "Aa1" Monday and maintained a negative outlook, meaning that another downgrade was possible in the medium term.

• Moody's affirms France top rating (25 May 12)
• Fitch reassures France on AAA rating (11 Jan 12)
• 'Miracle' if France keeps AAA: regulator (21 Dec 11)

Moody's was the second of the three major ratings agency to cut France's top rating, after Standard and Poor's did so in January. Fitch has maintained its top assessment of French debt to date.

French Finance Minister Pierre Moscovici told AFP that the downgrade was a "indictment of past management," a reference to the previous government, that would incite the new government of President Francois Hollande to "quickly put into effect" reforms that have already been announced.

A Moody's statement said the agency had based its decision on three factors, the first of which was that "France's long-term economic growth outlook is negatively affected by multiple structural challenges, including its gradual, sustained loss of competitiveness and the long-standing rigidities of its labour, goods and service markets."

In addition the country's fiscal perspectives were deemed "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 noted above."

Finally, Moody's felt that "the predictability of France's resilience to future euro area shocks is diminishing in view of the rising risks to economic growth, fiscal performance and cost of funding."

France is exposed to potentially greater funding obligations in support of heavily indebted eurozone partners, and as a member of the 17-nation bloc, "does not have access to a national central bank for the financing of its debt in the event of a market disruption," the agency said.