Sarkozy gets breathing space as Moody's holds AAA rating

BELEAGUERED President Nicolas Sarkozy got some temporary respite this morning when credit agency Moody's confirmed France’s triple-A rating, refusing to follow its fellow agency Standard & Poor's, which cut France by one notch to AA on Friday.

The news wasn't all good for Sarkozy, as Moody's said that they were reviewing whether they would maintain the debt-laden economy's 'stable' outlook. However, the French leader will take whatever crumbs of comfort he can find at the moment.

With less than 100 days until the first round of the presidential election on 22 April, Sarkozy is trailing in the polls behind his main challenger, Francois Hollande of the Socialists. Current polls show the leftist candidate beating the incumbent in the second round of voting by 54 to 46 per cent.

The prestige of the triple-A rating - which the country has held for 36 years - and the political impact of its loss was emphasised by comments attributed to Sarkozy last year, when he told advisors that "I'm dead if I lose the triple A".

Sarkozy's centre-right UMP party has been desperately attempting to talk down the downgrade, with finance minister Francois Baroin saying “It’s not a catastrophe,” and claiming that it was as if France was a pupil who, instead of scoring 20 out of 20, “had, for once, been given 19 out of 20”.

The president will also attempt to use the ratings cut in his favour, by claiming that in such turbulent economic times French voters should stick with the 'devil they know', rather than putting their faith in the untested Hollande, who has never even held a government post.

It's also suggested that Francois Fillon, the prime minister, will seek to introduce 'structural reforms' to the French economy - long a holy grail for Sarkozy - which will weaken the generous welfare state that many of the country's workers hold sacred.

For now, the verdict on the downgrade remains overwhelmingly negative - it was dubbed 'Black Friday' - but the canny Sarkozy may yet find a silver lining to this economic cloud. ·