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Even though the S&P downgrade was widely anticipated, it's still a blow, especially in France, which is the second-largest economy in Europe. For French President Sarkozy, the country's AAA credit rating was a source of pride. With the presidential election just three months away, yesterday's downgrade will have far-reaching political implications. As NPR's Eleanor Beardsley reports from Paris, French officials try to downplay the news.

ELEANOR BEARDSLEY, BYLINE: Though rumors swirled all day that France was headed for the downgrade, Finance Minister Francois Baroin officially announced it on the nightly news. He tried to soften the blow.

(SOUNDBITE OF NEWS BROADCAST)

FRANCOIS BAROIN: (French spoken)

BEARDSLEY: The United States, the world's largest economy, was downgraded over the summer, Baroin said. You have to be relative, you have to keep your cool. It's necessary not to frighten the French people about it.

(SOUNDBITE OF HORN HONKING)

BEARDSLEY: Out on the streets of Paris, people seemed to take the news in stride. Ratings agencies are often viewed with skepticism here because of their complete failure to foresee the 2009 financial crisis. Vincent Vigouroux says France will survive.

VINCENT VIGOUROUX: It's just a rating and I'm not so worried about France's situation. It's not very perfect but other countries are maybe worse. I think Standard & Poor's Moody's, Fitch have not any credibility in all the judgment they made in the past.

BEARDSLEY: Even though the downgrade was only one notch, to AA-plus, it is a blow in many respects. France was a Eurozone leader, coupled with Germany. Now, borrowing rates between the two countries are separated by several percentage points. Many pundits commented that France had now left the northern European club of good students to join the shirkers at the south of the class. The opposition socialists are already calling the downgrade a failure of Sarkozy's policies. The president will most certainly blame it on the socialists' objection to his reforms. Ironically, until a couple months ago, most French people didn't even know what a AAA rating was, but Sarkozy turned it into a badge of honor. He bragged about the notation in speeches and interviews like this one.

PRESIDENT NICOLAS SARKOZY: (Through Translator) The AAA, we've got it. Of Europe's 27 countries only five have it, and France is one of them.

BEARDSLEY: In the last two months, Sarkozy's government has been preparing for the downgrade by playing down the importance of the AAA. In a recent interview, the president said it wouldn't be good news if France lost it, but it wouldn't be cataclysmic either. Claude Weill is editor of left-leaning magazine Le Nouvel Observateur. He says now Sarkozy is trying to turn France's loss of its AAA to his advantage.

CLAUDE WEILL: From the moment it became very clear that we are going to lose this AAA, Sarkozy changed his argument. He said the situation is so hard, so complicated that you must trust me. I am one, I am the only one, who can run the country in this tempest.

BEARDSLEY: This tempest has already swept away governments in Spain, Greece and Italy. But Weill says in France, the opposition is weak and has proposed no alternative solutions to solving the debt crisis.

WEILL: As you know, French people are fed up with Sarkozy. In normal situation, he would be beaten certainly.

BEARDSLEY: Weill says that's the French paradox: that Sarkozy may be one of the only European leaders saved by losing the AAA. Eleanor Beardsley, NPR News, Paris.

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