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EU slams S&P for France credit 'downgrade'

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14:16 CET+01:00

Standard and Poor's erroneous downgrade of France on Thursday which caused turmoil in the money markets has been criticised as 'grave' by the EU's Internal Markets Commissioner, Michel Barnier.

"This incident is grave and shows that in the current situation of extreme market volatility and tension, market actors must show rigour and a special sense of responsibility," he said in a statement.

Barnier, who has been highly critical of agencies downgrading weaker eurozone members as the debt crisis deepened, said he was specially surprised to see an error made by one of the world's three leading ratings agencies.

The agency announced on Thursday that it had mistakenly announced to some of its clients that it had downgraded France's top "AAA" credit rating.

"As a result of a technical error, a message was automatically disseminated today to some subscribers of S&P's Global Credit Portal suggesting that France's credit rating had been changed," the firm said in a statement.

"This is not the case: the ratings on Republic of France remain 'AAA/A-1+' with a stable outlook and this incident is not related to any ratings surveillance activity. We are investigating the cause of the error."

Barnier said the glitch "reinforces my conviction that Europe must adopt strict rigourous rules" on ratings agencies. Proposed EU legislation he will submit next week notably will open the way for appeals to civil tribunals.

The French government has reacted angrily to the incident. France is fighting hard to retain its top rating in the face of pressure on its debt bonds which has risen as the political crisis in Italy has widened contagion from the eurozone debt crisis.

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