French finance minister Baroin says AAA situation is “serious”

François Baroin, French minister for the economy, finance and industry, has said the risk that France loses its AAA credit rating is “undeniably serious”, just days after Standard and Poor’s threatened to downgrade the credit rating of 15 eurozone countries.

Baroin admitted that while French government bonds were considered the “best” form of of protection for investors two or three years ago, today the country’s level of debt means French bonds are considered more risky.

“The paradox is that historically bonds issued by the French government have been low,” Baroin lamented.

To repair the situation France and other eurozone members must quickly consolidate public finances, attempt to stabilize the eurozone, reduce budget deficits and modify governance, Baroin said in an interview with French television channel Canal Plus.

Baroin evaded commenting on whether France was able to hold on to its AAA rating, simply stating that a lot would depend on this Friday’s summit between EU leaders.

“Neither Angela Merkel nor Nicolas Sarkozy will leave the table at this summit until a strong agreement is met,” he concluded.

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