Standard & Poor’s (S&P) on Friday lowered France’s credit rating by one more notch, ratcheting up the pressure building up, from both outside and within France, against President Francois Hollande who has become deeply unpopular.

France’s credit rating, which until a year ago was AAA is now down from AA+ to a simple AA.

Mr. Hollande reacted strongly to the announcement staring that the policy he was pursuing was the only one which could reassure markets of France’s fiscal and economic credibility.

“This policy, based on reforms already in force, is the only one which can guarantee the credibility of France and ensure the country’s national and social cohesion,” Mr. Hollande said in a speech to the World Bank in France.

He said reducing the budget deficit, strengthening competitiveness and generating employment were his main priorities.

Although there was no panic on the markets, France’s cost of borrowing touched 2.389 per cent on Friday against 2.158 per cent at close of business on Thursday.

S&P justified its decision saying France’s budgetary margin of manoeuvre had diminished and that the French State’s capacity for generating resources had gone down.

“The economic policies adopted since November 2012, the economic policies are unlikely to bring unemployment below 10 per cent by 2016 … the present level of unemployment reduces popular support for fresh structural reforms which in turn affects long term perspectives for growth,” the S&P said.

The French Prime Minister and Finance Minister denied these charges, saying the French economy remained robust.

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